Government believes changes will save it around $2.1 billion over the next four years.
Changes to reporting procedures for welfare recipients could be implemented as soon as July, should a draft legislation presented to parliament late last week pass by mid-May.
The reporting changes would mean that welfare recipients report their income as it’s paid rather than as forward estimates of what they might earn. Currently, people reporting income to Centrelink have to estimate how many hours they work in a fortnight and how much they’ll be paid.
The government believes the changes will prevent recipients being paid incorrect amounts and may even improve the accuracy and efficacy of its controversial debt recovery program.
The underpinning legislation was introduced to parliament by federal minister Alan Tudge last Friday. It is estimated the plan will save the government a total of $2.1 billion over the next four years and will affect around 550,000 Australians.
A new online portal will be set up to facilitate the change and single touch payroll will also be introduced, meaning a person’s income data will be automatically uploaded to the new system so Centrelink and other departments can double-check income received and tax paid.
The government’s reporting method has been a problem for years, and exacerbated by it feeding incorrect information to the robo-debt program.
However, the government refused to change the reporting system and relied on a robo-debt algorithm to track down what it assessed as incorrect payments.
The robo-debt system compared tax office and Centrelink data to recoup purportedly overpaid welfare payments.
The program was declared unlawful in November 2019 by the Federal Court and is now the subject of a class-action lawsuit.
Last week, internal emails between senior tax officials were made public, exposing how the government knew its robo-debt welfare recovery system was not lawful, well before it wound back the scheme.
In 2019, the ATO chased more than 80,000 payments totalling more than $80 million.
The opposition is calling on the government to pay back every cent to those who received unlawful debt notices.
“This is a mass act of unjust enrichment by the government. It is theft of people's money,” said Labor spokesperson Bill Shorten.
What do you think of the new reporting process?
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