In July 2016 the Australian Government rolled out a new automated income matching system for detecting and recovering debts. The Online Compliance Intervention Program, which soon became known as “Robodebt”, was designed to help the Department of Human Services collect $4.5 million in debt every day. In that sense, it was super efficient. Too efficient, even.
Robodebt resulted in up to 20 per cent (possibly $3,075,503 worth) of demands to repay debt that were incorrectly issued to the most vulnerable Australians.
At a Senate Committee hearing last week – specifically looking into digital services – the Acting Deputy Secretary of Integrity and Information Jason McNamara insisted Robodebt “went well”.
As reported by Innovation Australia, Senator Jenny McAllister was attempting to get to the bottom of how the idea for Robodebt came about, with the intention of understanding the processes that “didn’t go that well”, so the disaster would not be repeated.
McNamara: The departments view is we wouldn’t agree with the proposition it didn’t go that well.
McAllister: You think it went well?
McNamara: Yeah, yeah. We’ve made a submission to the Senate inquiry and made it quite clear that we think the project has gone quite well. We’ve delivered lots of savings. We have quite a number of reviews undertaken. We have changed some aspects of the system and we have improved aspects of the system.
But I don’t think we would agree with the proposition that the project hasn’t gone well.
McAllister: Mr McNamara it was a disaster. It produced incredible anxiety for a very large number of citizens.
McNamara: I’m looking at savings.
Yesterday the Department of Human Services said that the automated #robodebt system that issued 20,000 incorrect Centrelink debt assessments 'went well'. Imagine what failure would look like! @LindaBurneyMP pic.twitter.com/HQvwEqzAK4
— Senator Mcallister (@jennymcallister) March 23, 2018
The OCI was designed to match the earnings you’ve reported on your Centrelink record with the earnings reported by your employers to the Australian Taxation Office. When it was launched, detected discrepancies rose from 20,000 per year, to 20,000 per day.
The Commonwealth Ombudsman released a detailed report April last year into the failings of the OCI – calling the system “poorly planned, deficient and unclear”.
“If the customer does not engage with DHS either online or in person, or if there are gaps in the information provided by the customer, the system will fill the gaps with a fortnightly income figure derived from the ATO income data for the relevant employment period (‘averaged’ data),” the report reads. This is where the problems came from.
The Ombudsman confirms that since the rollout of the OCI, office received “many complaints” from those issued with debt notices.
In the normal course of doing business, you'd think that incorrectly issuing bills to the tune of tens of thousands would normally be a cause for concern.Read more
The accuracy of the debts is the first thing addressed in the report. The data matching system used in the OCI isn’t new to Centrelink. The Ombudsmen found that the 20 per cent discrepancy rate “was consistant with DHS’ previous manual debt investigation process”. It’s just that the rate of discrepancies increased enormously when the system was automated.
The Ombudsman said it was “satisfied that if the customer can collect their employment income information and enter it properly into the system, or provide it to DHS to enter, the OCI can accurately calculate the debt.”
“After examination of the business rules underpinning the system, we are satisfied the debts raised by the OCI are accurate, based on the information which is available to DHS at the time the decision is made.”
But when the DHS was left to fill in the gaps, the whole system went to pieces. “If the information available to DHS is incomplete, the debt amount may be affected,” the report reads.
Let’s just take a moment to look at the section of the report detailing customer service.
Poor service delivery was a recurring theme in many complaints received by our office. Customers had problems getting a clear explanation about the debt decision and the reasoning behind it. As the compliance helpline number was initially excluded from letters and was not obvious in the system, customers called general customer service lines resulting in long wait times. They could not always get clear information and assistance to use the online system.
Service centre staff did not always have sufficient knowledge about how the OCI system works, highlighting a deficiency in DHS’ communication and training to staff. In some instances, a more thorough manual intervention by a compliance officer would have saved the customer time and effort. We have made several recommendations for DHS to further improve its communication to customers and staff in relation to the OCI.
Another major issue investigated by the Ombudsman is the ten per cent recovery fee charged to over 97,300 Centrelink recipients following the implementation of “Robodebt”. The DHS, by law, is forced to add to debts where the customer doesn’t have what is deemed a “reasonable excuse”.
Here’s the legislation on “reasonable excuse”:
The term ‘reasonable excuse’ is discretionary but in basic terms the excuse must be one that would seem plausible and satisfactory to a member of the general public. For example, the refusal or failure must not simply be a deliberate act of non-compliance.
When determining if a person has a reasonable excuse for failing to declare income, the person’s circumstances must be considered. Factors that may contribute are:
- the person’s age,
- the person’s health,
- the person’s level of education,
- the person’s level of literacy, and
- any other personal factors that may have affected the person’s ability to correctly declare their income from personal exertion.
“The OCI automated the application of the recovery fee where there was no contact from the customer, or the customer responded that they did not have personal factors which affected their ability to accurately declare their income,” the report confirms. “This raised concerns for customers who may not have had an adequate opportunity to provide a reasonable excuse, for example if they did not receive the initial letter, or did not understand the connection between reasonable excuse and the recovery fee.”
The DHS has since scrapped the automatic application of the fee, in response to a request from the Ombudsman. Other improvements to the system include: “[making] it easier for customers who have a reasonable excuse to notify the department…clearer information and further invitation to provide a reasonable excuse in debt notification letters.”
Although this is a “from now on” change, the Ombudsman report also recommends “in certain cases” a review of past debts where the fee was applied.
The recent data-matching debacle that is Centrelink's debt recovery algorithm is likely to affect around 1.5 million Australians, demanding they repay government welfare based on dodgy links to incomplete Australian Tax Office records. It's bad software, rorting the citizens in our society that already have it pretty tough.</p> <p>But, before you take my word for it, watch this video. It's a totally honest and upfront explanation of the situation.Read more
In regards to the issue of transparency, even when a system is automated it still needs an “open decision making process that clearly sets out the issues the person needs to address to challenge a decision and the findings of fact on which the decision is based” the Ombudsmen says.
“Our investigation revealed DHS’ initial messaging to customers through its letters and in the system itself, was unclear and did not include crucial information such as a contact phone number for the DHS compliance team,” the report reads.
Crucially, the report also shows that “many complainants did not realise their income would be averaged across the employment period if they did not enter their income against each fortnight.”
The result of this was people with “fluctuating or intermittent income” having their income averaged. “In some cases this was a more favourable outcome for the customer,” the report reads, “and in others the debt was overstated.”
Making this fact clear is one of the recommendations from the report.
When Centrelink customers had difficulty locating evidence of employment income – particularly from many years ago – the DHS refuses to help, despite having the “information gathering powers” to obtain it directly from employers or other third parties.
In an effort to improve this situation, “we have recommended in certain circumstances, DHS should further support customers to gather employment income evidence to maximise the accuracy of possible debts,” the Ombudsman report reads.
So how could this whole thing have been avoided?
“Better project planning and risk management at the outset,” the Ombudsman says – including more rigorous user testing with customers and service delivery staff, a more incremental rollout, and better communication to staff and stakeholders.
“DHS’ project planning did not ensure all relevant external stakeholders were consulted during key planning stages and after the full rollout of the OCI. This is evidenced by the extent of confusion and inaccuracy in public statements made by key non-government stakeholders, journalists and individuals.”
In a final recommendation to the DHS, the Ombudsman says a “comprehensive evaluation of the OCI” as it currently exists needs to be carried out before it is implemented further, and even then it should be done incrementally, with special care taken to support those deemed vulnerable.
You can read the full report here.
Minister for Human Services, Alan Tudge, said “the Ombudsman’s report shows that the online compliance system is reasonable in its data-matching and can accurately calculate debt owing. He notes that we have made a lot of improvements already, but offers some very practical suggestions for further improvement which we will implement.”
In relation to obtaining evidence of income, however, the Ombudsman states in the report it “is not reasonable or fair in situations where customers have to collect evidence from several years ago, or where the customer does not have the capacity to obtain the evidence.”
And here’s a passage from the report relating to the time given to customers to respond to debt notices:
When the OCI system was first rolled out, customers had 21 days to respond to the initial letter. They could ask for two further extensions online and additional extensions if required by contacting DHS, but the process of asking for an extension was unclear.
Given the complexity of collecting historical employment information or the possibility that the customer may not have received the initial letter, we consider the 21 day timeframe was not reasonable or fair in all circumstances. We acknowledge DHS has now extended the timeframe to respond to 28 days from receipt of the letter, with options to ask for an extension.
“The unfortunate reality is that while most welfare recipients do the right thing, some deliberately defraud the system while others inadvertently fail to accurately declare their income and consequently receive an overpayment,” Tudge said in a media release today.
“Our compliance system is aimed at ensuring there is integrity in the system and the Ombudsman supports this goal, and the reasonableness of asking welfare recipients to explain discrepancies between tax office data and self-reported income data. We want to be fair and reasonable to welfare recipients but also fair to the taxpayer who pays for the welfare payments. The Ombudsman’s report will help us to continue to achieve this.”
For the Department to defend Robodebt at this stage, and look back on it as a system that “went well”, is a slap in the face to the thousands of citizens that suffered unwarranted stress, anxiety and depression as a result of its existence.