Pensioners targeted in $980m ‘robo-debt’ expansion

Older people will be the target of an expanded “robo-debt” collection measure the Department of Human Services has confirmed will raise close to $1 billion.


Despite the fall-out from the government’s debt collection saga, the DHS will expand the program from July 1 using information from the Tax Office about pensioners’ interest earnings and asset values.

Pension recipients earning interest on term deposits and income from property are expected to shoulder most of the $980 million savings burden the government has projected over the next three years from the expansion of its debt program.

The department will check ATO data against the income and assets clients reported to it to decide whether to pursue debts, DHS officials told senators.

DHS representatives confirmed the $980 million figure at the final hearing of the Senate inquiry into the controversial “robo-debt” program on Thursday, but said that discrepancies in income and assets detected would be manually checked by staff.

Senate committee member and Labor senator Murray Watt said outside the inquiry the government should pause the expansion of its debt collection program.

“No one has been able to convince this inquiry that this system has been running so smoothly that we aren’t going to see a whole bunch of new problems emerge on July 1 with this expansion, with a particularly vulnerable group of Australians being older people,” he said.

Department secretary Kathryn Campbell described the expanded debt collection measures, announced in the mid-year financial outlook in January, as the DHS told the Senate committee it made $70 million more than expected in the first year of the maligned “robo-debt” program.

Amid some pointed exchanges with senators, department officials defended its payment of debt collectors using commission – a practice of payday lenders – and said letters sent to Centrelink clients about income discrepancies were “initial clarification letters”, not debt notices.

When asked the correct term for an “error” in sending a letter, Ms Campbell said: “They’re initial clarification letters where the recipient or former recipient has been able to provide clarification which means there is no need to continue with the process”.

The DHS was sending 10,000 letters a week due to constraints of registered post, down from 20,000 a week earlier in the program.

Referring to ATO data used to compare with DHS records of welfare recipients’ employment in identifying possible debts, officials admitted it was difficult to know when they had been employed in a financial year if the Tax Office didn’t detail specific periods of employment.

The government expects to save $4.5 billion in total from its data-matching program.

The Senate Committee is expected to release its report into the “robo-debt” system in June.

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