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Centrelink no longer requires immediate payment from those sent robo-debt letters

The Guardian logo The Guardian 6 days ago Christopher Knaus

Centrelink’s debt recovery system will no longer demand immediate payment from individuals who believe they have wrongly billed, the government has announced. 

The change is one of a number of amendments designed to improve the fairness of the controversial system, which were announced by human services minister, Alan Tudge, on Tuesday night.

The system is facing inquiries by both the commonwealth ombudsman and a Senate committee, prompted by repeated complaints that the system is wrongly issuing debts before putting the onus on the recipient to prove their innocence through a complicated, unfair and at times broken system.

A key criticism is that the system forces individuals, often vulnerable and on low incomes, to begin paying the money back even if they are disputing the debt. That would now change, Tudge said. 

“This has been a longstanding practice for successive governments, whereby – and not just for this online compliance system, but for all debt which is owed to the government – that as soon as a debt notice is issued you have to enter into a repayment schedule,” Tudge told the ABC.

“I’ve recently made the decision to say that, well, if you ask for a review then you don’t have to enter into a repayment schedule. It’s only after the review is completed and you still owe the debt that you’ll have to enter into that repayment schedule.”

Tudge has previously defended the system as fair and working as intended. He said the government would also attempt to make it easier for individuals to get in contact with Centrelink once they received the initial letter generated by the automated debt recovery system, which notifies them that a discrepancy has been detected between income reported to Centrelink and income reported to the tax office.

People targeted by the debt recovery system have complained of being unable to reach Centrelink through its overloaded phone system to dispute discrepancies within the required 21-day window. That has led to many being landed with inaccurate debts.

Users would reportedly no longer need to use the troubled MyGov portal t The Government has softened its debt recovery system after backlash over recipients being required to pay back money even if they are disputing the debt. © Shutterstock The Government has softened its debt recovery system after backlash over recipients being required to pay back money even if they are disputing the debt. o confirm their income details with Centrelink, but instead would be able to log on directly to the online service that allows them to check and confirm their income details. Bank statements can also now be used to prove income, reducing the onerous requirement on welfare recipients to retrieve years-old payslips from past employers.

The government estimates 75% of welfare recipients would be able to access bank statements online. A new website upgrade also included “simpler language and better screen flow”, the government said. 

It’s the second round of changes the government has announced to the system since problems began to emerge in early December. Last month, Tudge announced the system would take further steps to ensure that initial letters generated by the debt recovery system were being received. He said registered post would be used, as would more current addresses from the electoral roll. That sought to prevent debts being raised automatically against people who had not received Centrelink’s initial letter.

Tudge said he had always said the system would be constantly refined.

“I’ve always said all along that we’ll constantly make refinements to the system so that we can be reasonable to the Centrelink recipients, but also fair and reasonable for the taxpayer who’s paying for it,” he said on Tuesday.

Tudge defended Centrelink’s phone system, which has previously been found to have let a quarter of all calls go unanswered. The minister said he had been calling Centrelink’s phone line personally to check wait times. He said he had never had to wait to get through.

“I have been calling it almost every day myself to check on this, and I have never, ever had to wait,” he said. “Now, I’m not saying that that will be the case for evermore, but it is a very short wait time to be able to get through to somebody for them to give you a bit of reassurance as to what the process is.”

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