Age Pension: Centrelink to expand robo-debt program

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Pensioners could be the next group to be in the firing line with confirmation that Centrelink’s robo-debt recovery program will be expanded from 1 July 2017.

In an expansion of the program, which the Department of Human Services believes will raise close to $1 billion, Centrelink will cross reference information it holds on interest earned and asset values with details received from the Australian Tax Office (ATO).

Representatives from the Department of Human Services confirmed to the Senate inquiry in the ‘robo-debt debacle’ that the program will raise a total of $980 million over three years once the expansion of the program is in place. However, in good news for pensioners, it also confirmed that any discrepancies would be manually checked, hopefully avoiding unnecessary debt collection notices being sent to pension recipients.

After the Senate inquiry, committee member and Labor senator Murray Watt called for the program to be paused. “No one has been able to convince this inquiry that this system has been running so smoothly that we aren’t going to see a whole bunch of new problems emerge on July 1 with this expansion, with a particularly vulnerable group of Australians being older people,” he said.

At the height of the program, which to date has raised $70 million more than expected, Centrelink was sending 20,000 letters a week. Due to postal constraints, this has been reduced to 10,000. During the inquiry, the Department of Human Services conceded that it was difficult to know when exactly during the financial year people has been employed as the ATO records used to cross match data didn’t have such details.

The full report into the robo-debt recovery program is expected to be released in June.

Read more at thecanberratimes.com.au

Opinion: Let’s hope lessons have been learned

The expansion of Centrelink’s robo-debt recovery program is likely to have many pensioners worried, but hopefully the addition of crosschecking the details will prevent any further debacle.

From day one Centrelink’s robo-debt recovery program was flawed from the humanitarian view point. Data-matching information from two systems that hold a different scope of detail could only result in discrepancies. That such discrepancies could be over a period of five years and that it was up to the individuals to provide clarification in such a short space of time, over a busy Christmas period no less, was simply asking too much of a system that had not been fully tested.

It seems, however, that lessons have indeed been learned and the next phase of the program, which will cross reference income earned and asset values, will at least have any discrepancies checked by a human. This isn’t to say that a human won’t make errors, but it is a step in the right direction.

With just over a month until the expansion of the program commences, it may be worthwhile checking that the information held by Centrelink is indeed correct.

What do you think? Do you think the program should be expanded? Do you think pensioners will be wrongly targeted or does the inclusion of cross checking of discrepancies by a human give you some comfort? 

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Written by Debbie McTaggart

213 Comments

Total Comments: 213
  1. 0
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    Most age pensioners don’t pay tax so how can their pensions be cross referenced with the ATO.

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      Working pensioners nan – I was one up until a year ago. Let’s see what these vultures can find in my murky past, where I calculated every fortnight and sometimes went in their favour a little.

      If they take me on, they will be fighting me all the way to the top and then I’ll be claiming payment for stress etc.

    • 0
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      Absolute parasites the lot of them – a politician cops a lifetime pension for stuffing the country – a public servant can pull out for stress or injury and cop a lifetime indexed pension as well, and they can all go get another job and still get it without losing any ‘pension’.

      The peasants must survive on a pittance as reward for putting up with the shenanigans of politicians and public servants in ruining (sic) the country, and then not only is it not indexed, but they lose some if they have the damned gall to go out and work for a few more measly dollars.

      One rule for one – another set for the peasants.

      Until everyone is handed equal treatment, they have no moral ground to stand on.

    • 0
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      The rich have to be the majority in this country to have voted this Government in. They are the only people that benefit from this Government.

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      Centrelink will cross reference your assets with the ATO.

    • 0
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      Good comments, TREBOR. They need to:

      a) Stop the system till it is fully fixed (first, sack / replace the morons who produced a system which does not work and has created stress for many). In the case of Age Pensioners, I would worry about the impact on the health / indeed survival of some if they receive wrong demand letters.

      b) Use the system for the recovery by ATO of the high levels of fraud there, e.g. how did they get the evasion to $165 Million in a recent case, without ATO taking action earlier? That can recover far more in lost tax revenue.

      c) Leave Age Pensioners alone – by giving Age Pensions to all who have worked / paid taxes here for say 20 years and tax all income above that (ATO can do all that). Then, a much smaller Centrelink workforce will be needed to monitor the rest.

    • 0
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      “will cross reference information it holds on interest earned “, wrote Debbie McTaggart
      in this article.

      – The interest earned by pensioner funds in the savings bank, term deposits has no relevance because all declared fund amounts are subject to the Income Deeming Rule (IDR) irrespective whether you earn 10% pa or 2% pa from such cash investments. The IDR is 1.75% for first $49,200 and 3.25% for any amount over. You can have up to (approx) $150,000 in cash bank savings or term deposits earning interest and still qualify for the full pension. In addition you can earn $162 per fortnight in extra income from casual or part time employment and still qualify. The affect on the full pension is if, one exceeds the allowed threshold and uses up their entire Work Bonus Offset. –
      – Unless, of course, the government intends to shift the goal post again and reduce pensions by a calculation that penalises the pensioner for earning more interest than the IDR. If such was to be the case then many pensioner can expect a refund for the overcharging by the government by the IDR. That’s not going to happen,-
      – But, if you do have an amount of funds that is the maximum of the threshold, any interest earned will add to your savings and you will exceed the threshold amount. The thing to do is to spend your interest earned, on whatever, every year and maintain your savings balance up to the threshold limit so you don’t exceed it. Nothing wrong with this, it helps to spin the commerce economy. Once you exceed the threshold the IDR will begin to reduce your full pension accordingly. –
      – It is not the amount of interest earned that might be an issue but how much you declared in the change of your circumstances regarding cash holdings.

  2. 0
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    Once again, target those least able to afford this nonsense. Why not target assets of the most wealthy to correlate their incomes and assets. Or ensure that the big companies pay the proper tax and not use “dodges” and offshore accounting to cheat the OZI society.

  3. 0
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    I await with bated breath the next round that these constitutional liars can come up with.

    • 0
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      Time for all pensioners to demand some peace and quiet after their lifetime of working and contributing to this country’s wealth.

      However, if this is too hard for the government to arrange, pensioners have every right to advocate that politicians be made to wait until they reach 70 before they are eligible to collect their parliamentary pensions. The Aged Pension eligibility age of 65 for workers should never have been increased, as from 1 July this year, every year the pension eligibility age increases by 6 months until it reaches age 70.

      If the government makes workers work until 70 before they are eligible for the Aged Pension, then politicians shouldn’t be eligible for their pensions until they turn 70 either.

      We have, unfortunately, ended up with a greedy government who couldn’t give two hoots for ordinary people, and they are getting remunerated far too generously by the Australian taxpayer for doing this country and its people what amounts to a great disservice.

    • 0
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      @Play Fairly. You are right in what you say. Their day will come and it is not too far away. Dissent is on the rise all over this Country from both young and old, so it is just a matter of time. I just hope I can hold out long enough to see the hangings of the political elite. I want to party.

    • 0
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      I agree politicians should have to abide by the same rules as the rest of us, however, I doubt they will ever even consider a suggestion they need to wait until 70 years of age for their pensions to be paid into their pockets.

    • 0
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      Not quite right, Play Fairly. The pension age is going to be increased to age 67, not 70.

      This webpage: https://www.finder.com.au/australian-age-pension-eligibility-requirements
      states that:

      “To be eligible for the age pension, you must be 65 years or older, regardless of whether you’re male or female. From 1 July 2017, the qualifying age will increase to 65 years and six months. The qualify age will increase by six months every two years, to 67 years by 1 July 2023.”

  4. 0
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    Shouldn’t Representatives from the Department of Human Services be recovering monies rather than saying that the program will raise money. Shows how out of touch they are with the real world. It’s a recovery program not a money making one. Besides if a lot of honest law abiding pensioners dont pay tax how’s it going to work?

    • 0
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      ATO know what your assets are so they will cross reference them.

    • 0
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      I’ll bet if they find that they owe pensioners a refund that the pensioners will be waiting a while to receive it but if the shoe is on the other foot it’ll be pay up quickly or else.

    • 0
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      Bad luck if you haven’t claimed everything you won’t get a refund.

    • 0
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      How does the ATO know your assets. It knows shares, managed funds and interest on bank account as well as your earnings from wages and super but no other assets.

    • 0
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      ATO wouldn’t know what private assests an individual has because ATO is only concerned with Income Assessments and Income Assesment from property investments and Share investments. DHS would know only the assets that you need to declare.

    • 0
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      Colonel C’Link know your declared assets…. how many don’t declare them? You could have a boat in the backyard and not declare it… big deal – it doesn’t earn you money.

      If you have cash assets or property HERE in Australia, they can check on it.

      To me, that’s never been a problem – but recent activity has lead to a glaring need for a total overhaul of the entire retirement package scheme – for all!! And that may well include dumping the assets test and paying all pension, then taxing all income and fringe benefits and income-bearing assets above that.

      Then watch the loop-holes appear for the mighty….. bevies of beagles legal beavering to bash holes in the system.. as usual … acres of accountants aching to accrue assets for the rich without penalty….

    • 0
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      @OG , financial assets yes I agree. But what about non-financial ones?

    • 0
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      That’s where there other intelligence gathering comes in.

    • 0
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      @OG you mean “snoopers” in the backyard!! Be careful for what you wish such a move would be all encompassing. “Every move you make,I’ll be watching you”. Would you really want such a society.

    • 0
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      If you are on a full OAP with no assets and cruise on luxury cruises 9 months of the year I think that would sound the alarm bells very loudly. If you buy and register a luxury car then they will know about it. Buy that million dollar painting at auction etc. You need to behave like an OAP with nought otherwise you will get caught. Way too many jealous people in our society today I’m afraid. Even I have been put into Centrelink and I have nothing at all to do with them myself.

    • 0
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      As I’ve said before, Budway etc – any time I wasn’t 100% sure, I usually over-stated income by a few dollars – so if they come after me I will want a fully indexed refund cheque.

    • 0
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      @TREBOR. It doesn’t work that way unfortunately. But you are wise to overstate if not a 100% certain.

  5. 0
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    Nan- Centrelink can check with the ATO any details that has your Tax file number on it.
    So most bank accounts have the TFN on it. If you make a very large amount of interest and that does not reflect what you told centrelink you have in the bank, then a robo letter will be generated. So lets say you have $600,000 in the bank generating say 4% interest, but only told Centrelink you have $200,000, then this can be picked up- Does this make sense? This is how Centrelink will check the Aged Pensioners.

    • 0
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      leek. But doesn’t Centrelink already do that?

    • 0
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      They probably do it at random where there are suspicions regarding your declared change of circumstances. For example, where a person declares an inheritance of $300,000 as a change of circumstances and that amount is reduced by half within the first 12 months. You can expect a phone call asking you to explain. One pensioner bought a residential unit as a principal residence, furniture and a car, declared value of furniture, car and the balance of funds and they got a phone call from Centrelink H/O to “please explain”. I’m sure Centrelink would have assured themselves as to the explanation by running a back door audit/ check on the pensioner’s bank statements, Land Titles Office and anything else.

    • 0
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      I am sure they know already Nan, once I used to get a form to fill out and modify all my bank details. assets etc but haven’t had one for a couple of years, I rang once when I paid out a large amount and was told to only notify them if it was $2,000.00 or more.

  6. 0
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    Before Centrelink targets aged pensioners by cross reference with the taxation records, how about the Taxation Dept. cross reference itself and recover the 165 million it has allowed to be fraudulently misappropriated.

  7. 0
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    I cannot fathom how most comments here seem to indicate that it’s acceptable to misrepresent their financial situation to obtain more money from our hardworking taxpayers, surely a fair system for all Australians is desirable, this is a step in the right direction towards achieving this

  8. 0
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    I wonder how many people are employed in Centrelink to spend so much time recovering this money and how much their wage bill, super, sick leave, holiday pay etc is costing ? But of course if you employ lots of people to do this work it keeps your unemployment figures down. I know a fair amount of PS’s in other agencies and believe me there could be millions of dollars ‘recovered’ in a complete analysis of PS practices and employment levels.

  9. 0
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    This terrifies me. Not because we are guilty of fraud, but because my husband was on a Carers Pension for his mother who lived with us, then he transferred to the Age Pension after she died. At the same time he continued to earn around $6,000-$8,000 a year in the small manufacturing business that he had operated it from home since 1986. The business steadily declined over the years because of cheaper imports. We declared everything & lodged tax returns through an accountant. The ABR contacted us and suggested we cancel the ABN because of the low income. I sought advice from the ATO who suggested we switch to Hobby Income, which we did & we cancelled the ABN. There was no income at all shortly before and after the switch. We weren’t required to lodge a tax return, we just had to let them know of any earnings. I retired from office work just over 3 years ago and we are both in a full pension because I had very little superannuation & my husband has none. I worry that I might have missed something or that Centrelink will assume things and/or make a mistake. If they do, I don’t know if I have it in me anymore to rake up and put together evidence that we have declared everything and paid all our taxes. I’m tired, and I’m done with paperwork, dealing with bureaucrats and stress.

    • 0
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      You cannot bury your head in the sand Jen50 and ignore this. It will catch up with you. I would suggest you be pro-active and make sure you have your ducks in a row and do it before 1 July when you are not under pressure to respond to an enquiry about your business affairs.

      And if you have any concerns then contact the ATO and/or Centrelink ahead of time. Saying you are “tired, and done with paperwork, dealing with bureaucrats and stress” will not be a defence if it turns out something has been overlooked.

    • 0
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      If he got his pension and continued working earning $6,000-$8,000 pa.
      Did he declare the income fortnightly to Centrelink? Did he continue to do his Tax Assesmrnt annually declaring the pension income and the employment earnings? Because he should have. If he did, then nothing to worry about, if he didn’t, then both of you need to make a quick trip to Centrelink to sort things out. Take his pay slips with him. Bear in mind that, the first $81 per week ($162 per fortnight + any Work Bonus Offset) may minimise any liability owed to Centrelink. Unfortunately, ignorance is not an excuse, if that is the case

  10. 0
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    responding to TREBOR re public servant parasites… must clarify that while politicians do receive a public funded pension, public servants do not as they are like any other person with superannuation. Please do not make unfair blame and criticism on public servants for the decisions of government and circumstances of politicians. Very different scenarios

    • 0
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      Sorry Autumn, public servants receive super of between 15.1% and 17.4% which is much higher than the 9.5% to those in the private sector.

    • 0
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      Public servants also mostly pay 5% of their after tax pay into their super and it is compulsory. In the Private sector the employer pays the super. If public servants work for 35 years, and invested the compulsory 5% themselves they would actually have a lot more than they end up with. I’ve done the math.

    • 0
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      This is from the Department of Finance web page Autumn.

      “PSS members can make contributions of between 2% and 10% of superannuation salary or can elect to make no contributions. Those contributions are, in most circumstances, paid each fortnight into the PSS Fund. When you contribute your employer also pays an employer productivity contribution of approximately 3% of superannuation salary into the PSS Fund. Your defined benefit also includes an unfunded component that depends on the level of your contributions.”

      Your claim that the 5% is compulsory seems to be at odds with the Department.

    • 0
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      And anyone can salary sacrifice into super or make after tax contributions at the same or even higher rates (subject to the super caps).

    • 0
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      Sunday, the comment “in the private sector the employer pays the super” is not an accurate assumption” When I was working superannuation was calculateed in the “salary package” that one received so it was not a “gift” from the employer nor an extra cost to the employer all worked out when you applied for the job. Also thanks to %&#$* John Howard and his superannuation surchage theft I had to pay an extra tax on my super. Due to a large allowance for after hours callout and standby (fixed allowance) my taxable income was 33% higher than my my superannuation base (employer would not pay super on allowances) so I was hit by a stupid tax that was taxing me for something that I didn’t receive but because my taxable income fell into the trap I was ripped off nothing like a badly thought out piece of legislation.

    • 0
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      You miss my point – retirement early on disability will net a PS 2/3 salary indexed for life – and they can still work another job without penalty to pension.

      One rule for the masters, and one for the knaves, and one for the little boy who runs all the slaves….

    • 0
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      Autumn, I did not send in the post above so it seems as if two of us have the same nickname. We probably both should change our nicknames to save confusion in future.

    • 0
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      Old Man, it used to be 5% then they added more flexibility in recent years but for the current pensioners it was compulsory after tax contributions. I know because I worked in this area and truly having less take home pay was hard and if I had invested elsewhere I would have made more even with the govt contributions. There is no residual capital value to leave to your estate and your eligible spouse gets 67% but nothing for independent kids. Once in pension phase no access to a lump sum. The fortnightly indexed super is good but so would the investments I could have made. However,I take Trebors point but at least public servants who retire can’t access their super until their preservation age. Unlike parliamentarians who get their super when they leave office regardless of age which is just wrong

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