An Illawarra solicitor says clients have arrived at his office in a “state of distress” over Centrelink’s debt recovery program.
The Illawarra Legal Centre’s Ian Turton told a recent Senate inquiry into the program, dubbed ‘robo-debt’, that many people found the threat of a debt was an “affront to their to their personal integrity”.
“I have had clients present to my office in a state of distress arising from the fear of a debt and its consequences and fear of prosecution,” Mr Turton said.
“This is a natural response for people who have a debt, or the threat of a debt, hung over their heads when they think they have done the right thing.”
Mr Turton said he had helped a person who was unemployed for three months between periods of high income and told they were liable to repay a debt.
“During that period of unemployment they were entitled to Newstart. They happened to earn their income in large lumps on either side of that, and the very nature of the robo-debt process meant that this person was faced with a debt,” he said.
The inquiry was referred to the Senate community affairs references committee in February.
The impact of the debt collection processes upon the aged, families with young children, students, people with disability and jobseekers is among the inquiry’s terms of reference.
More than 217,000 notices were issued by the robo-debt system between July and December.
The computer-generated letters compared a client's information on the Department of Human Service’s files with Australian Taxation Office data.
More than 36,000 of those letters did not result in any debt to Centrelink.
“What the robo-debt process does is shift the onus onto the client to prove their innocence, and that is unusual,” Mr Turton said.
“Data-matching is not new. The problem with the system as it stands is that, rather than Centrelink making the inquiries when there is perhaps evidence to suggest a person has underreported their income, they turn it over to the client to contact them.”
– with SMH