Centrelink repayments for 86,000 people have been paused after the lawfulness of the debt calculation system has come under scrutiny and not because of the long-ass phone wait times.
An inquiry found that Centrelink was once again using a system which incorrectly calculated the amount of debt recipients owed, and forced them to repay.
Tens of thousands of welfare recipients were given incorrectly calculated debts after Services Australia — the organisation that overseas Centrelink — compared the recipients reported income to their payslips.
If the payslip didn’t align with the reported income, the debt system adjusted for the discrepancy by estimating an average daily income, and then giving the welfare recipient a newer and bigger debt.
The fact that the reported income was compared to the recipients payslip has been accused of breaching security laws.
In response to the investigation from a commonwealth ombudsman who said there were as many as 100,000 victims of unwarranted debt, Centrelink has paused the repayments of 86,000 people it claimed owe money.
Centrelink stated that it “paused debt repayments and internal reviews that may involve income apportionment in response to concerns about the way it was used in the past.”
Services Australia clarified that this issue is unique to the infamous Robodebt scheme, as that used an automated system to incorrectly calculate debts.
However this separate offence has been slammed as “unlawfully apportioning” by the investigating ombudsman, especially due to the fact this “apportioning” system was using recipients’ payslips to determine debt is in breach of the Social Security Act.
Services Australia are in the process of notifying the 86,000 people that their debts have been paused and not dropped.