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Granddad forced to repay robodebt he believes he doesn't owe

9News.com.au logo 9News.com.au 9/10/2019 Emily McPherson

A Victorian grandfather who was given a $7000 Centrelink robodebt says he is being forced to pay back money he can't afford despite believing the debt is inaccurate.

Ken O'Shea, who is a licensed rigger, told senators at a parliamentary inquiry into the government's controversial debt recovery system today that he often worked uneven hours and was likely a victim of robodebt's "flawed averaging system".

"I've always endeavoured to declare my income to Centrelink. When I haven't had the pay slips, I have tried to over-estimate the amount," Mr O'Shea said a in statement to the inquiry.

"So, you can imagine my surprise when I was told I owed over $7000 due to an alleged robodebt. I thought that this was mistake."

However, Mr O'Shea, who is now getting by on Newstart payments, said when he contacted Centrelink he was told it was up to him to prove the debt was incorrect.

"They told me to provide bank statements. Historical bank statements are expensive - $4 per page over 12 months. This was money I didn't have," he said.

Mr O'Shea said Centrelink had promised to help contact his employers directly to track down his payslips, but they never did.

a man in a suit standing in front of a brick wall: Grandfather Ken O'Shea says Centrelink is yet to properly explain how they calculated his $7000 robodebt. © Supplied Grandfather Ken O'Shea says Centrelink is yet to properly explain how they calculated his $7000 robodebt. He said Centrelink put him on a $15 a week payment plan against his will, which was more than he could afford on his $225 a week Newstart payments.

"Every three months I have to contact Centrelink to beg for it to not be raised to $85 a fortnight," he said.

"One day a week I have my grandchildren so that my daughter-in-law can go to work. The eldest is at kinder. I feel it deeply in the pit of my stomach when I have to say to her, 'Sorry darling we can't get an ice-cream on the way home, let's go and pick some herbs instead'."

Mr O'Shea was one of two Victoria Legal Aid clients giving evidence at today's inquiry hearing. Victoria Legal Aid currently has two cases challenging the legality of robdebt in the Federal Court, while Centrelink is also facing a potential class action in the High Court.

The inquiry is the second the Senate has conducted into robodebt.

Also giving evidence at the inquiry today was Sydney University Emeritus Professor of Law Terry Carney.

Professor Carney served as a member on the Administrative Appeals Tribunal (AAT) for almost 40 years until 2017 and as part of his role oversaw disputed Centrelink debts.

During his time on the tribunal he ruled that several robodebts were illegal.

Robodebt was introduced in 2016 and since then about 500,000 debts have been raised.

Under robodebt, yearly income data from the ATO is matched with welfare payments made in fortnightly periods.

Professor Carney told senators that the averaging system was fundamentally flawed and placing the burden of proof on Centrelink customers went against the law.

"The maths is wrong and the law is wrong," he said.

Centrelink issued more than 190,000 debt notices through robo-debt in the first nine months of this financial year. © AAP Centrelink issued more than 190,000 debt notices through robo-debt in the first nine months of this financial year.

Professor Carney said he believed Centrelink had decided not to challenge adverse robodebt tribunal rulings at a higher level of the AAT, where cases become public, because "it's embarrassed".

"Centrelink doesn't have a legal leg to stand on," Professor Carney said.

The debt recovery scheme was also criticised by national criminal justice and human rights lawyer Greg Barns. Mr Barns, who was representing the Australian Lawyers Alliance, said he had observed undue stress being placed on his vulnerable clients when they were given debt notices based on a flawed averaging system.

However, Liberal Senator Hollie Hughes defended the program, saying "significant changes" to the program had been rolled out in the past few years.

Initial letters received by Centrelink customers under the current iteration of the scheme - called CUPI (Check and Update Past Income) - were not debt letters, rather an opportunity for customers to explain discrepancies in information provided by them to the ATO and Centrelink, Senator Hughes said.

"We can't be making public policy on the basis that it might stress someone out in regards to receiving a request for information and clarification," she said.

In response to suggestions that Centrelink should be using its powers to investigate potential debts and check the accuracy of ATO data anomalies first, rather than placing the burden on the customer, Senator Hughes cited privacy concerns.

"I'm really not sure how you're suggesting we can do this better other than trampling over people's individual rights and going straight to their employer and bank without any form of consultation at all," she said.

Centrelink has been accused of using a target-driven collection system to claw back welfare debts, according to three former compliance officers who worked for the agency. Centrelink has been accused of using a target-driven collection system to claw back welfare debts, according to three former compliance officers who worked for the agency.

Professor Carney said he disagreed that there would be a legal issue with Centrelink checking with employers and banks to verify the accuracy of potential debts, as the department already had these powers under current privacy laws.

Reviving similar grievances expressed during last week's inquiry hearings, Senator Hughes also raised objections to those giving evidence using the term "robodebt", which she described as "media jargon".

After facing a huge public backlash when its online compliance system was rolled out in 2016, and on the recommendation of an ombudsman, the Department of Human Services added some human elements to the automated process.

The term robodebt was no longer relevant, Senator Hughes argued.

However, Senior Administrative Law lecturer Darren O'Donovan, from La Trobe University, said the term was still entirely relevant, adding that he was not opposed to the online compliance initiative.

"I'm against robodebt, the specific cohort of debts that are occurring without the required meaningful human intervention," he said.

"The point is, there are humans, no one is saying there aren't humans, what I am saying is it's not meaningful enough."

Contact reporter Emily McPherson at emcpherson@nine.com.au.

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