Government Continues To Defend Centrelink's Broken Data Matching System

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In the normal course of doing business, you'd think that incorrectly issuing bills to the tune of tens of thousands would be a cause for concern. That's been the case for at least one single mother this past week, after she received a $24,000 debt notice from Centrelink's automated data matching system (and an order to start paying it back immediately).

But despite increasing concerns about the accuracy and fairness of the process, the federal Department of Human Services is insisting all is well.

For those unfamiliar with Centrelink's new system, it works like this. Rolled out in July, the system compares the information of welfare recipients stored by Centrelink with that stored by the Australian Taxation Office. If there is a discrepancy - say, the system detects that someone is reporting more income to one agency than the other - the automated system issues a notice and the user is given three weeks to prove that they are entitled to their Centrelink benefits.

The principle makes sense - if someone is cheating the system, comparing the information is a simple way to sort it out. But there's a lack of basic humanity in it all, which is causing real distress.

It starts with the initial notice. Whenever Centrelink has flagged someone for discrepancies it sends a letter by snail mail, an SMS and a notice to their MyGov account. But many users, The Guardian reports, don't receive the notice due to not having a MyGov account, having moved address, or being unable to lodge a dispute online because of - surprise! - bugs in the Centrelink site.

If Centrelink doesn't receive a response within three weeks it assumes the debt notice is correct and immediately demands that users begin paying the debt back, even if the amount is later disputed. And gathering evidence of old pay slips can be difficult, because the automated system can issue notices for discrepancies up to six years old. That limit might even be extended from January 1, after an omnibus savings bill passed earlier this year abolished the six-year term on welfare debt.

Media agencies like the ABC and The Guardian have continued to receive reports about users being unfairly targeted. A common theme crops up whenever a welfare recipient reports working for a company with its trading name, while ATO records use another (usually the registered business name). The automated system spots the discrepancy, but isn't able to pull from a database of information matching trading names with business names.

The outcome? Centrelink's automated system thinks people are working more jobs than they actually are, does some quick fortnightly sums, and sends a bill to the user demanding that they pay the money back.

An example reason given by Centrelink to one user. Image: Reddit (u/iamtezr)

This is exactly how a single mother got hit with a debt notice for $24,215 a fortnight before Christmas. The Guardian reported she was disputing the matter, but the department had requested she pay back $60 a week in the meantime. Another woman told the ABC she stopped receiving benefits three years ago, but because two of the companies she worked part-time for had different trading names to what was listed with the ATO, Centrelink's system assumed she was earning the income of four jobs.

Around 20,000 notices have been sent out each week since the system went online, up from 20,000 a year. Federal Human Services Minister Alan Tudge has previously said he expects the system to send more than 1.7 million compliance notices over the next 3 years, although at the current rate it will send 3.12 million notices over the same period.

But according to Hank Jongen, general manager of the Department of Human Services, the system is functioning just fine. "When data inconsistencies are detected, the system generates a letter ... advising people of the discrepancy and asking them to either confirm or update their details online using myGov ... if, for example, an employer has incorrectly reported the time period for which income was earned, people are able to correct this information themselves using the online tool," he told The Guardian.

According to Jongen, 72 per cent of users who received a compliance notice since September were able to resolve the discrepancy online, with only 2 per cent required to provide supporting evidence. That means 26 per cent of users who received notices had to chase the matter up through Centrelink's human processes. And at the system's current rate of 20,000 notices a week (presuming from September 1 to today), Jongen's own figure means nearly several thousand Australians have had the burden of proof placed upon them.

That's not the only quirk in the system, either. The ABC noted that Centrelink averages payments into fortnights, even though the ATO only deals with annual payments. That's a huge problem for students or seasonal workers who only earn an income in one part of the year, and collect benefits while they are unemployed or studying. And should Centrelink chase someone up for pay slips going back several years, it becomes a nightmare if your place of employment has changed bookkeeping systems, accountants, or gone under entirely.

Unsurprisingly, there are calls to suspend or scrap the system entirely. Independent MP Andrew Wilkie has called on the government more than once to resolve the issues before Christmas. He's also referred the matter to the Commonwealth Ombudsman, but any action there won't happen until the new year.

Needless to say, the system is broken. Centrelink doesn't seem to think so, of course, but it's the agency recouping the money.