An Outrage: 4000 Wrongly Accused of Fraud Weekly

18 January 2017


The Christmas-New Year period gave many of us the chance to unwind after a busy year and spend time with loved ones.

I certainly appreciated a short break after a full-on first six months in this job.

But for thousands of Australians it was a “summer of hell”, to use Labor Leader Bill Shorten’s words, in which the Turnbull Government hounded them for alleged debts to Centrelink.

Mr Shorten described as “a toxic mix of incompetence and cruelty” the pro forma letters Centrelink sent out to many thousands of people alleging they owed money, sometimes many thousands of dollars, just before Christmas.

This hounding behaviour understandably caused a great deal of distress for many people, especially those on low incomes, at a time of year when they were least able to cope with it.

To make matters worse, Centrelink’s debt recovery program reverses the onus of proof, which means that even if people don’t have a debt and don’t respond, the letter will automatically have the debt raised.

By the Government’s own admission, one in five of these letters being sent out is wrong. The computer matching data between Centrelink and the Tax Office makes a mistake 20 per cent of the time.

That means that about 4000 Australians every week are being accused of fraud incorrectly.

From the outset, Labor called for this flawed system to be suspended. It is unfair and unjust to approach these alleged debts with such a heavy hand.

Now, no one is saying that debts that are owed to Centrelink should not be repaid.

Sometimes genuine mistakes are made. But the way the government has gone about it is disgraceful.

People are reporting to my office that it is impossible to talk to someone at Centrelink about the debt – that phone wait times are long, and that people are bounced from department to department.

There is no question that the Centrelink system can be difficult to access, particularly as the government continues to withdraw services from shopfronts and directing clients to an imperfect online system.

Many have come to my office for help, and the same is the case in local members‘ offices throughout Australia. 

The frustration is palpable.

It’s not just the debt that is distressing, but the lack of help they get when they try to find someone at Centrelink to talk about it.

One fellow phoned my office very distressed upon being told he had a debt of $24,000. After some investigations by my staff, the entire debt was waived. 

It appears the computer thought he had underestimated his income, when in fact he had not lodged a tax return because he was under the tax-free threshhold.

He did not owe anything.

Others have reported difficulties with proving their innocence, as they no longer have payslips from five years ago and are unable to obtain them. Without the proof, they have had to pay the debt and hope it is reversed later.

Remember that one in five of these debt letters is incorrect, so if you do receive a letter and suspect the debt is not correct, do seek advice.

You can call my office, or phone Legal Aid on 1800 888 529.