Services Australia accused of ‘covering up’ robo-debt’s automation mess

While the Department of Human Services (DHS) cum Services Australia has used its blow-softening and buzzword-riddled terminology to make its robo-debt scheme seem less severe than it has been for the last few years, department officials, including one of its ministers, this week have taken that one step further.

After Minister for Government Services Stuart Robert claimed legal professional privilege in providing responses to the Senate Community Affairs References Committee earlier this year, his spokespeople on Thursday night followed a similar suit.

During Senate Estimates, Services Australia deputy CEO Annette Musolino, Secretary of the Department of Social Services Kathryn Campbell, and Minister for Families and Social Services Anne Ruston faced probing on Centrelink’s Online Compliance Intervention (OCI) initiative.

In 2016, the department kicked off the data-matching program of work that saw the automatic issuing of debt notices to those in receipt of welfare payments through the Centrelink scheme. The OCI program automatically compared the income declared to the Australian Taxation Office (ATO) against income declared to Centrelink, which resulted in debt notices, along with a 10% recovery fee, being issued whenever a disparity in government data was detected.

One large error in the system was that it incorrectly calculated a recipient’s income, basing fortnightly pay on their annual salary rather than taking a cumulative 26-week snapshot of what an individual was paid.

Centrelink’s OCI program from 1 July 2016 through 31 August 2019 saw 1,159,662 assessments be initiated using the automated data-matching technique.

The federal government in November paused the automated data-matching element of robo-debt, but Services Australia is still using income information from the ATO to identify “significant discrepancies” with income information.

Services Australia is currently undertaking an analysis of all income compliance reviews to identify where income averaging was used to determine a debt and was meant to have a solid number of how many people were affected by automation activities, as well as a plan of attack, by the end of January.

After an hour and a half of Estimates questioning, not much was answered by the three department execs, but a little bit of clarity around what the department is currently doing was gained.

“The department has been moving through an identification process to identify those debts that were part of the income compliance program that were impacted by averaging. That process is ongoing and we’re still working through those matters,” Musolino said on Thursday night.

“We want to be very careful that we’re identifying all the matters that are potentially impacted by averaging … it is an ongoing exercise.”

Greens Senator Rachel Siewert asked the trio for the current number of individuals affected — including in this “cohort” — but was told she wouldn’t be getting the figures, with Campbell pointing to an ongoing court case as her reasoning, saying a discussion needs to be had with Robert first, despite knowing she’d be appearing at Senate Estimates and likely facing questioning on the matter.

“We’re not in a position to provide numbers to you … and I want to be careful … we have ongoing legal action, there are matters before the federal court in relation to the cohort,” Musolino added.

Concerned with Campbell’s defence and Ruston’s public interest immunity claim, Labor Senator Deborah O’Neill accused those involved of a cover up.

“A claim against public interest that is anticipated in a possible conversation with the minister is just another level of cover up here. It’s completely inappropriate. The secretary should have come prepared to answer these questions,” O’Neill said.

Ruston said she was making a public interest immunity claim as she believed answering questions on those that were having their debts re-calculated could affect the Commonwealth’s position in respect to the resolution of the class action currently underway.

“We are working through that information, and we haven’t identified an end date at this time,” Campbell said in response to a question asking when the “cohort” will be fully identified.

“I don’t accept the assertion that we’re stringing it out. We are doing this in a methodical manner to ensure an accurate assessment of these debts is identified.”

“What we need to do is look at customer records and identify if any, or any, or all of the debt is impacted by income averaging … we need to work through those in a methodical way to understand if they are in fact impacted by income averaging, or that there was other material in play at the time,” Musolino said in response to how long the identification process is expected to take.

Musolino confirmed, however, that following the announcement in November to pause the automated data-matching element of the OCI, Services Australia stopped all new referrals to the ATO, then commenced a process of prioritising debts that had been flagged in the ATO to determine if they were impacted by income averaging.

Prioritisation was also given to the debts that had been handed to an external collection agency.

“The only ones we’ve continued recovery on are those that are not impacted by income averaging,” she said, noting that if they were impacted by income averaging, recovery was frozen.

“We’re continuing to engage with the recipient, but income averaging will not be used as the final data point when it comes to determining whether there’s a debt or not,” Campbell added, in between claiming immunity from answering Senator’s questions.

After prying out of Campbell the composition of the government ministry at the start of robo-debt — including that current Prime Minister Scott Morrison was Treasurer at the time and was potentially involved in the creation of robo-debt — O’Neill proceeded to accuse Campbell of being ill-prepared throughout the various changes to the initiative. 

“I cannot believe that as the head of the department, Ms Campbell, you would come here ill-prepared to answer questions that are clearly in the public interest. I’m very concerned at the technique that you used [to delay],” O’Neill said.

“This is this is a pretence, a cover up, it’s been cooked up by the department against the interest of the Australian people here tonight and it just amplifies the wrongs that have already been inflicted on people because of this scheme.”

In addition to calling out the trio as covering up government wrongdoings, O’Neill also called into question the capability of Campbell, asking other department representatives present if Services Australia had confidence that any other Budget measure implementation overseen by Campbell would have a proper legal basis in social security law.

“Because robo-debt has been found absolutely wanting,” she said.

“You are up to your neck,” O’Neill directed at Campbell. “There is way too much cover up about robo-debt.”

Reading directly from an OCI determination that was made by the AAT in April 2017, O’Neill said, “no debt or debt component is able to be founded on extrapolations from Australian Tax Office records”.

“On each occasion we see the same commentary, ‘no debt or debt component is able to be founded on extrapolations from Australian Tax Office records’,” O’Neill said.

Considering almost everything from Thursday night was taken on notice, the responses will be interesting, should the department not use its immunity claim in answering them.

At least this time, the department didn’t say that its data-matching program went well because it produced savings. This is despite claims from individuals that the OCI system had caused them feelings of anxiety, fear, and humiliation, and reportedly even resulted in suicide

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