Centrelink's Robo-debt Fail: The Commonwealth Ombudsman Reports

Thursday 13 April 2017 @ 11.52 a.m. | Legal Research | Taxation | Torts, Damages & Civil Liability

The Department of Human Services’(the DHS's) controversial ‘robo-debt’system lacks usability and transparency, according to a Commonwealth Ombudsman’s report released on Monday, 10 April 2017. This report follows behind a string of complaints about the Centrelink Robo-debt program. These complaints have also resulted in a reference to the Senate Standing Committee on Community Affairs (which is scheduled to report back to the senate by 10 May 2017) and a Private Member's Bill introduced by Mr Andrew Wilkie MP (namely, the Social Security Legislation Amendment (Fair Debt Recovery) Bill 2017 (Cth) which, after its introduction on 13 February 2017, is still sitting in the House of Representatives at second reading stage) [for more detail on these matters see our article Centrelink's Robo-debt Fail Provokes a Senate Inquiry and a Private Members Bill].

Main Findings

Broadly, what the Commonwealth Ombudsman's investigation revealed was that the DHS was ". . . guilty of poor service delivery and inadequate planning". The report stopped short of condemning the automated debt collection process, saying it was ". . . no more inaccurate or unfair than the manual process".

In the report, the acting Commonwealth Ombudsman, Mr Richard Glenn is reported as saying, that the online compliance intervention (the OCI), launched by the DHS in July 2016, which was expected to claw back approx $4 billion, ". . . could have been delivered and planned for better" but "was not fundamentally flawed". The way the OCI was intended to operate was to match Tax Office employment data with Centrelink data and send debt notices out when discrepancies were identified and flagged.

Some of the Key Fails

The recurrent theme, according to the Ombudsman, in the numerous complaints received, was poor service delivery, Mr Glen saying:

“Customers had problems getting a clear explanation about the debt decision and the reasoning behind it, . . .”

A lack of clarity in the initial debt letters was another problem identified by the Ombudsman. The "compliance helpline number" was not included on the letters and was found to be difficult to find online, the result being long waiting times because Centrelink customers then directed their calls to the general customer service lines and tended to flood them. Further, it was found that once customers got through to a "human customer service" the assistance provided was "not always helpful", the report stating:

“Service centre staff did not always have sufficient knowledge about how the OCI system works, highlighting a deficiency in DHS’ communication and training to staff.”

These types of fails resulted in the Ombudsman concluding that the DHS should have better prepared before rolling out the scheme and enlarging it, and that such should have included speaking to staff and Centrelink customers about the scheme:

“The OCI is a complex automated system that was rolled out on a large scale within a relatively short time frame. There will inevitably be problems with the roll out of a system of this scale, . . . In our view, many of the OCI’s implementation problems could have been mitigated through better project planning and risk management at the outset. This includes more rigorous user testing with customers and service delivery staff, a more incremental roll out, and better communication to staff and stakeholders.”

Other areas identified in the report are:

Failure to consult with all relevant external stakeholders producing inaccuracy in public statements made by key non-government stakeholders, journalists and individuals; and
A shortfall in manual support available to customers when they had questions, particularly for those most vulnerable.

The Ombudsman was not supportive of the DHS automatically charging a ten percent debt recovery fee to customers who had a debt and did not have a reasonable excuse for it - and while acknowledging the practice was legal, raised concerns for those customers who may not have had an adequate opportunity to provide a reasonable excuse, where say, they did not receive the initial letter, or did not understand the connection between having reasonable excuse and being charged a recovery fee. [Note: this process has since changed and DHS no longer applies the fee automatically where there is no contact from the customer, or the customer says personal factors affected them and the fee is suspended while a review is under way. Further, letters are now sent by registered post.]

Report Stops Short of Canning OCI

Although the Ombudsman in his report indicated the process could have been ". . . easier to navigate, more transparent and decisions made easier to challenge", the Ombudsman did not attack the reasoning behind the OCI program. He found in the report that even though a fifth of the "Centrelink Robodebts" were later successfully challenged by clients on the supply of extra information, such a rate of successful challenge should not be referred to as an "error rate" - the figure being consistent with that associated with manual debt investigation and therefore, the data matching process was not at fault. Nor was the Ombudsman in the report critical of the ATO practice of averaging income out over a person’s employment period, a practice which could result in the income of some people being overstated and the issue of debt notices by Centrelink. The Ombudsman did indicate though that this should be explained to Centrelink customers. The report concluded:

“After examination of the business rules underpinning the system, we are satisfied the debts raised by the OCI are accurate, based on the information which is available to DHS at the time the decision is made.”

Reaction and Comment

The Human Services Minister Mr Alan Tudge, is reported as having welcomed the report and indicating the Government would seek to improve its communication with the public:

"The unfortunate reality is that while most welfare recipients do the right thing, some deliberately defraud the system while others inadvertently fail to accurately declare their income and consequently receive an over payment . . .".

The Opposition's spokeswoman for Human services Ms Linda Burney, is reported as saying the Government's approach was a essentially a fail:

"All of this could have been avoided if there'd been better planning and better testing of the system before minister Tudge and the Government launched into sending tens of thousands of letters out to people, . . .".

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