Linda Burney, Labor's human services spokeswoman, has written to the Australian National Audit Office requesting they investigate Centrelink's controversial $4.5 billion debt clawback project amid ongoing accusations that it is unfairly targeting people and miscalculating bills.
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The opposition and community groups are maintaining pressure on the government as the new system, enabled by data-matching with Australian Taxation Office information, causes consternation by handing out mistakenly oversized debts and contacting some social security recipients who don't owe Centrelink any money.
Ms Burney's letter to Auditor-General Grant Hehir requests that, in light of "overwhelming" constituent complaints about the contentious process, the ANAO examine the effectiveness, risk management and planning of the system and the actual value of the resulting budget savings, including analysis of whether falsely calculated debts have already been banked.
"There is considerable public concern over the administration of this program as well as a lack of clarity around the value of 'savings' derived from the program to date," she said in the letter, provided to Fairfax Media.
"Recently the acting Minister for Human Services, Hon Christian Porter MP, stated that since the beginning of the financial year the program had made savings of $300 million but Mr Hank Jongan, General Manager of [the Department of Human Services], later claimed that this number represented the identified debts," she wrote.
"This discrepancy requires investigation given that the program has a failure rate of at least 20 per cent."
According to Mr Porter, Centrelink has been sending out 20,000 discrepancy notice letters a week - up from 20,000 a year - and 80 per cent of cases have resulted in actual debts owed, meaning that one fifth have been cleared of owing anything.
On Thursday, Centrelink's Twitter account was directing customers to Lifeline, responding with concern to distraught complaints. This came after independent MP Andrew Wilkie said constituents had visited his office terrified after being contacted by Centrelink and brought "to the brink of suicide".
Mr Wilkie also requested the Commonwealth Ombudsman look into the matter and they have requested more information from Centrelink.
A pre-existing ANAO performance audit, due to report back in February, is assessing the Department of Human Services' and Department of Social Services' "management of fraud prevention and compliance budget measures".
Defending the system, Mr Porter has said that the total debt recovery target is $4.5 billion and dismissed that people were being unfairly targeted. He has argued that the resolution of incorrect discrepancy notices was very easy.
Speaking on the ABC's 7.30 program on Wednesday night, Mr Porter said they would continue data-matching even though it may make some people "upset".
"I don't think [it] is an unfair or unreasonable system," Mr Porter said.
"We have a responsibility to the taxpayer to make sure that welfare recipients are not overpaid. Where there is an information which is available to us as a government, which suggests that the earnings reported to Centrelink are different to the earnings reported by the employer to the ATO, we have a responsibility to check and to seek further information."
Ms Burney told Fairfax Media: "A program that's working well doesn't send 4000 false debt letters a week - that should be clear to anyone with any common sense."
She contended that, while recouping overpayments and debts was legitimate, innocent and honest people should not be made to feel they have misled the government - "that isn't just unfair, it's plain nasty".
After receiving the initial letter saying that a discrepancy has been detected, people are given 21 days to confirm or update information, after which any resulting debts are pursued. Some people have been required to provide supporting documentation like pay slips and bank statements.
The main issues raised with the system are that it retrospectively miscalculates eligibility for payments by averaging out income across the year, in line with ATO protocol, whereas Centrelink relies on regular income reporting that shows the often fluctuating levels of fortnightly income.
It has also counted some income twice because the names of employers have been different in the ATO and Centrelink systems. On top of this, some people have complained that - up to six years on from when they were receiving payments - they have not kept the necessary documentation to contest decisions.
For help or information call Lifeline 131 114 or beyondblue 1300 224 636.
