Commonwealth Ombudsman slams Centrelink robo-debt scheme

Customers treated unfairly, system lacks transparency, says Ombudsman.

Ombudsman slams robo-debt scheme

The Commonwealth Ombudsman has savaged Centrelink’s automated debt recovery system as unfair and lacking transparency and has made several recommendations to improve the process in the future.

Acting Commonwealth Ombudsman Richard Glenn, who released the 113-page report on Monday, said while the debts raised by the Department of Human Services (DHS) were largely accurate there were issues relating to communications with customers.

“We found there were issues with the usability and transparency of the system,” Mr Glenn said. “There were deficiencies in DHS’ service delivery and communication to customers and staff when implementing the system.

“Many of these problems could have been reduced through better project planning, system testing and risk management,” Mr Glenn said.

The report found the system was rolled out on a large scale in a short time frame, and that problems were inevitable under such conditions.

Those problems could have been avoided by including customers and other external stakeholders in the design and testing features.

The report was also scathing about the way the department dealt with complaints and the 21-day timeframe given to respond to their debt letter.

The report stated that given the complexity of collecting historical information, the 21-day timetable “was not reasonable or fair”.

The report found many welfare clients didn't know they had to call the compliance helpline, and so flooded Centrelink's general customer service line instead.

But Centrelink staff did not fully understand how the new system worked because they had not been trained properly.

The Ombudsman’s report recommends placing the compliance helpline number on the first page of the initial letter and advising people that they can ask for an extension of time online or by calling the compliance helpline number.

Other recommendations include:

  • reassessing the 10 per cent recovery fee applied to some debts already discovered by the system
  • ensuring the 1800 compliance number continues to be adequately resourced
  • providing comprehensive training as required to specialist compliance staff
  • capture record information obtained from complaints and internal reviews

 

Human Services Minister Alan Tudge said the Government had already implemented some recommendations and says the latest suggestions will also be implemented.

“He (the Ombudsman) notes that we have made a lot of improvements already, but offers some very practical suggestions for further improvement which we will implement,” said Mr Tudge.

Read the Ombudsman’s full report.

Opinion: Public service cuts make Government sloppy

Automation is meant to make things easier, but any move to a new system needs rigorous planning and foresight for potential problems. This is something that has been sorely lacking from this Government, not only with Centrelink’s automated debt-recovery system but also with last year’s disastrous online Census.

Instead, what we have seen are major and costly projects released with a ‘close enough is good enough’ approach. The Ombudsman’s report highlights how the automated debt recovery system was released in a short time frame and on a large scale, when it could have benefitted from a more incremental roll-out.

In the past, projects the size of an online Census and the debt-recovery system would have had significant supervision, but the Abbott Government elected in 2013, and this Government, have been hell-bent on public service cuts without acknowledging the intellectual property that is being lost as senior bureaucrats leave Canberra.

Since 2012, Australian Public Service staff levels have dropped from 153,466 to 137,848 at 30 June last year, with suggestions from some members of Government that they would still like to make further cuts.

What the Ombudsman’s report does not reveal is the human cost of some of the country’s most vulnerable people dealing with the frustration of this poorly-delivered system.

When the automated debt-recovery system was introduced, the Department of Human Services was swamped with complaints and people were panicking with the lack of assistance they were receiving from Centrelink staff. If all Centrelink staff had received adequate training ahead of the release of the automated debt recovery system, a great deal of heartache could have been avoided.

Do you think the robo-debt debacle was avoidable? Were you affected? Do the Ombudsman’s recommendations go far enough?

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    COMMENTS

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    jackie
    12th Apr 2017
    10:07am
    Instead of cutting back jobs for automation our Government needs to create jobs with real people. It's people that save money not machines. Computerisation is good but should never be the end all to everything because it is too unreliable, making it costly in the end.
    Rae
    12th Apr 2017
    11:10am
    So far Jackie all the automation seems to do is switch the processing from people employed to do it to the consumer.

    We now pump our own fuel, fill our tyres etc ourselves, scan and pack and process payments ourselves.

    We even print our own receipts and tickets.

    Yes a few service jobs would be better. I agree.
    HarrysOpinion
    12th Apr 2017
    12:06pm
    Computerisation can be unrelable because (1) computers are assembled and tested by incompetent human beings 2) programmed by incompetent human beings 3) used by incompetent human beings. Just like our current government that is managed by incompetent and inhuman beings.
    jackie
    12th Apr 2017
    2:35pm
    Rae and HS I suppose it doesn't help when Centrelink has been privatised as well. The CEO gets $7M per annum. I suppose this is another shrewd means to pay an individual.
    GeorgeM
    19th Apr 2017
    4:36pm
    While noting the issues, the Ombudsman probably hasn't gone far enough - the people responsible for this shambolic system roll-out without adequate "system testing" in a "short timeframe" should be sacked (including the CEO with his grossly excessive salary as noted above, who has been defending it), and the system should be suspended immediately till it is properly tested and rolled out gradually.
    Rae
    12th Apr 2017
    11:07am
    What is the 10% recovery fee. Is that to the private debt recovery agency lucky enough to get this government sponsored contract?

    Not in their benefit to help anyone obviously.
    bobby
    12th Apr 2017
    11:58am
    From talking to people affected by the debt recovery program, it seems to me that there are innocent people who have been overpaid through error on the part of Centrelink staff or the system. I have heard stories of people who have done the right thing advising the Dept of changes in their assets or income, only months later being advised that they have been overpaid. The error being on the part of Centrelink not processing the information received. Many of these people are suffering hardship because the repayments are deducted from their pensions or bank accounts. One person said that when she asked how the error happened, she was told "sometimes the info falls through the cracks". I wonder if Centrelink is improving the system to make it prevent this type of error from happening again.
    niemakawa
    12th Apr 2017
    3:57pm
    That is true. Centrelink requires a person to notify them of any changes to their situation within 14 days and 28 days if a person lives outside of Australia. Yet it can take them months to process. From personal experience I can attest to this. Best to call them if nothing has been done after 1 month of submitting any documents. Keep a record of calls, dates/times and always ask ( and retain) for a Centrelink receipt number for future reference. Unfortunately unless you ask for this information they will not volunteer it.
    Eddy
    12th Apr 2017
    12:03pm
    As a former public servant I cab vouch that these last two debacles (ie Robodebt and the Census) are only two more examples of government ineptitude when it comes to contracting IT (and other) services. I worked in a department where large numbers of contracts were negotiated by public servants and we got caught time and time again by the professional negotiators employed by contractors., My department eventually learned and we got better. The scenario I suggest happened (as have seen it before) is, that in the bid to reduce cost overruns and implementation time and costs, the Centrelink team dropped the rigorous testing that would have identified potential problems and have them rectified before release of the program. The lesson here for Centrelinkj (and others) is do not trust contractors, do not take short cuts, do not defend the indefensible and admit it if things go awry.
    justme
    12th Apr 2017
    12:15pm
    And when departMENTAL heads get paid more than pollies it seems to separate them from reality.
    Unfortunately we see far too often paying big money bears no relationship to value for money.
    EG: The Tony Shepard report in contradiction with the Intergenerational Report.

    12th Apr 2017
    3:02pm
    The debts were largely accurate and the problem was with communucation

    So nothing really to see here
    let Centerlink get on with the job of collecting debt from the rorters
    Rodent
    12th Apr 2017
    7:50pm
    Raphael, so after reading the excellent 113 page Ombudsman's report your only conclusion was, debts were largely accurate and the were communications issues.

    Perhaps you need to actually read the full report, you may have something more intelligent to say
    niemakawa
    12th Apr 2017
    9:34pm
    There is a certain group which I call the "Untouchables" who are never targeted, something to do with human rights blah blah
    Rosret
    12th Apr 2017
    3:24pm
    My friend on a pension was given an airline ticket for an 8 day trip overseas to see her family who live overseas.
    She came home to find Centrelink had cancelled her pension because she had been on the pension for less than 2 years. It was fixed with a friend driving her to a Centrelink office 30 km away but she was still penalised $68!
    This may seem like nothing to anyone other than a pensioner. She is living in abject poverty and misses her family so much - hence the family's gift of a trip to the USA.
    Centrelink's robo-flop is the cruelest action ever introduced since the beginning of the industrial age in the C19th.
    Anonymous
    13th Apr 2017
    6:11pm
    Conversely, I know a bludger who has faked disability for decades and never worked a day in her life, yet she was able to trip around the world and live abroad for months without losing benefits (trips paid for with gifts from a rich parent living overseas who hid her money for her in a foreign bank). Then, having inherited $500,000 she contested a will and secured a further $100,000 to add to what she had hidden overseas, build a million-dollar water-view house, and keep claiming a full pension. Photographic evidence has been presented to Centrelink proving the disability she claimed in a sworn Affidavit does not exist, yet she is not even questioned.
    Missskinnylegs
    12th Apr 2017
    3:25pm
    Raphael - we are not all rorters! I advised Centrelink in 2013 that my shoulder accident compo had increased and therefore my pension should be adjusted downwards. When they did not contact me I was too busy trying to get used to an arm with a permanent impairment to follow up. I did the right thing - now 4 years later they want $$ back from me - they can go jump! You have 28 days to go to tribunal but their review officer takes 3 months to look at case - good grief! It is all such a waste of time.
    Anonymous
    12th Apr 2017
    4:12pm
    You should not have spent the extra $$$ -it wasnt yours to keep and spend

    If a bank makes a mistake and deposits $1million into your account , would you keep that too?
    niemakawa
    12th Apr 2017
    4:19pm
    Raphael. Yes what you say maybe true, it wouldn't take the bank 4 years to find out. Even if you ask Centrelink to reduce your entitlement pending any adjustments by them they will not do that. Maybe Missskinneylegs could have taken it up again but it seems that she was not in a position to do so with bad health and all.
    Anonymous
    12th Apr 2017
    4:52pm
    Sure Niemakawa

    When it comes to government money - seems that people think its ok to keep it

    4 years and she did nothing. That's theft
    niemakawa
    12th Apr 2017
    5:04pm
    @Raphael. I am not giving unbridled support to Missskinnylegs, but you have to question why it took 4 years for Centrelink to act.
    Captain
    12th Apr 2017
    6:11pm
    Raphael, if missskinnylegs notified Centrelink and after 4 years they did nothing about recovering the ovepayment then perhaps the overpayment should be waived. How long after giving notification of an overpayment should you expect to wait?

    I would say that 12 months is a suitable wait time. If they do not act within that time frame then they should not be entitled to attempt recovery.

    If an overpayment occurred and the recipient did not notify Centrelink then they should have to repay the overpayment.
    Anonymous
    12th Apr 2017
    6:42pm
    Neimakawa and Captain - you are assuming Skinnylegs followed protocol in advising Centerlink if at all

    So easy to blame Centerlink and absolve all responsibility

    "but i told them" - that's what they all say

    Sorry - not buying it
    niemakawa
    12th Apr 2017
    6:51pm
    @Raphael, I suggest you go back and read the comments I am not blaming Centrelink but if they wait 4 years to assess an update in circumstances, then surely there is need to question that action. The ball is in Missskinnylegs court to take up this matter further.
    Anonymous
    12th Apr 2017
    7:07pm
    statute of limitation on debt is 6 years I believe

    good luck to missskinnylegs

    she'll lose that battle and rightly so

    beggars belief that you think centerlink should not collect but the public utility or any other commercial creditor can
    KSS
    12th Apr 2017
    9:20pm
    I have to agree with Raphael on this example. Missskinnylegs notified Centrelink of a change yet continued to accept payments she knew were wrong and did so for 4 years! She may have had an injured shoulder but that did not affect her brain. She could have and should have followed up with Centrelink each time she received the payment she knew was wrong. Time to pay it back.
    Rosret
    13th Apr 2017
    4:32pm
    My goodness Raphael - I do hope nothing happens untoward to you. How would you know if you had been overpaid. I have seen the multitude of pages of documentation sent to recipients each month , changing amounts, changing regulations etc. Most people without an accounting degree would just accept that Centrelink knew what they were doing and were dispersing the correct amount.
    It's their error and if the client has been honest in all their disclosures then it's Centrelink's fault and they should have to wear it.
    ...and Rachael... you just may be wrong about people's political bias. I am ashamed of the Liberal Party at the moment because they are continually projecting "above" the general populous. It's not the compassion we came to know from John Howard and we need to fight to make this cabinet see the people.
    Anonymous
    13th Apr 2017
    6:15pm
    A friend reported a change I'm circumstances and it took Centrelink 5 months to reassess entitlements. He was entitled to MORE as a result of the change, but they didn't backdate the increase to the date of advice. When he complained, they said they were overworked and way behind in processing data, but they had backdated to the date of advice. No, they had backdated to the date of his THIRD reminder to them, and they still claim that was the first advice they received even though he evidenced providing the earlier advices.
    niemakawa
    13th Apr 2017
    6:25pm
    @Rainey. Many updates can be made through the myGov portal. You can send follow up letter through this channel as well. When I have had to go personally to a Centrelink office to submit documents/forms I insist that they give me a stamped receipt on a copy. I would follow it up again although I understand that there is a time limit on backdating increases, unlike over-payments .
    niemakawa
    12th Apr 2017
    4:01pm
    Fortunately most of my dealings with Centrelink have been pleasant and the staff were very helpful on each occasion. The cutting of jobs has not helped these people and they seem to get the brunt of complaints. Robots are not needed to handle such sensitive information and for the Government to outsource their debt recovery procedures is nothing short of scandalous.
    jonty
    13th Apr 2017
    4:00am
    OK sidestepping a bit, but assuming this Centrelink Crap algorithm was the Bees Whiskers and did what it was supposed to do then this government would recover/collect what its imperfect system should have collected in the first place.
    OK assuming more money in this governments coffers, then according to their Mantra there would be more money for tax cuts for business, therefore more money for Shareholders the majority of whom will take it out of the country.
    With the tax cuts that have been announced this government is not concerned one iota in balancing the budget or living within its means.
    The Liberals are only doing what they were created to do; support and use every means possible to get money to business and therefore shareholders. Oh and of course they were born to Rule.
    So vote for them you know what to expect. Unless you are one of 'them' don't expect any consideration, compassion or sympathy as these are humanitarian or socialist traits which are an abomination to them. 'Fair Go' is in their vocabulary, but they don't believe it.
    I hope the older generation is finally beginning to wise up and finally vote in their best interests.

    Unfortunately the younger generations have grown up in a fairer society than a lot of their elder brethren, and take it all for granted.
    They don't appreciate that better standards of living were hard fought for and won by Labor, only to see and find out too late that all the decent reforms are gradually being wound back by the Liberal/Conservatives.

    There is enormous wealth being created all the time, but most of it all ends up in the wallets of the few enormously wealthy.
    Believe at your peril that all political parties are the same. They are not.
    They all have to play the political game to get elected. But once in Canberra you can certainly tell who cares for ordinary people ( that's most of us ) and who doesn't. Labor is the only reason we still have some tolerance and decency.
    The coalition are hell bent on taking us back to servitude and poverty.
    Anonymous
    13th Apr 2017
    5:11am
    Bloody hell
    What a load of socialist crap
    Spoken like a brainwashed labor supporter

    14th Apr 2017
    7:40am
    "This is what inequity looks like!
    The rich scamming the system to avoid their obligations, while the poor are hounded by debt collectors for, by comparison, minimal sums.
    In the 2014-15 financial year, 46 millionaires claimed to have taxable income below $6,001, one claimed to have taxable income between $6,001 and $10,000, and another claimed to have taxable income between $10,001 and $18,200, putting them all below the tax-free threshold.
    None of them paid the Medicare Levy!!''

    Yet some arrogant self-serving trolls keep crapping on here, claiming the rich pay enough tax and demanding welfare be cut further.
    Anonymous
    14th Apr 2017
    3:39pm
    Who are these 46
    Have you seen their tax returns
    What a load of crap

    I had a taxable income of $10,000 last year and I have assets over $1m

    Does that make me a rorter
    niemakawa
    14th Apr 2017
    3:45pm
    @ Raphael, it does not. Anyone that submits a tax return and has all documents to substantiate their income and tax deductions, then that is legitimate. No rorting or tax avoidance has has occurred in such cases. Some people will use a tax agent but the responsibility of keeping records still lays with the taxpayer.
    LiveItUp
    15th Apr 2017
    1:20pm
    Only 46 Rainey. I say there would be more that that many millionaire self funded retirees not paying any tax. Afterall their super is tax free and they can earn nearly $30,000 before paying tax besides their super income.
    niemakawa
    15th Apr 2017
    2:33pm
    @Bonny, I would say that around 90% of taxpayer funded retirees do not pay any income tax. Many of these would have been paying minimum income tax, if any, during their "working" lives. I use that term loosely as many probably shied away from that as well. Self-funded retirees, ( I am not one) should be left alone they deserve every penny they have and their efforts are not there to be wasted on those that took the easy way out pre-retirement, without a care about how they would support themselves in later life. These people deserve to live on the aged pension, they will just have to manage as they brought it upon themselves.
    Aussie
    22nd May 2017
    12:39pm
    Of course .... we are the targets ... $165 million tax fraud is on the way to be put under the rug ... and forgotten for ever ..
    So now we pensioners have to pay for the $165 Million .....correct ???? is this all familiar ????

    Why us all the time ..... because we are older .....

    Well as from today I will not pay any taxes and I will take as much advantage as I can get .... and "Get me if you can" .... remember the movie ... ...Lets play the game and have fun with luxury cars and nice 5 start trips .....

    "Do to others what they do to You" ..... Why not they get away with $165 million tax fraud ... then we are also entitle to do the same .... This is now a legal precedent in my book
    professori_au
    27th Mar 2019
    3:30pm
    The automated robot debt collection service is corrupt. If I was in business and sent out alleged debts and provided no evidence to support my claim I would not get far. also to claim the onus is on the debtor to prove they do not owe the money is a false premise as how can someone prove they do not owe the money when they do not know about it. If someone sent me an account the way CentreLink does they would get a poltie letter in return asking for an itemised detailed account of the alleged debt. Why should people have to pay money just because CentreLink says they owe it. let CentreLink provide detailed evidence of an alleged debt. Other businesses cannot et away with such behaviour