Media Release: False to say there is a 20% error rate in Centrelink debt recovery system

13 January 2017

The Hon Alan Tudge MP

Minister for Human Services

Labor's ongoing accusation that there is a 20% error rate in the Centrelink debt recovery system is false.

Every letter that is initially sent is based on a discrepancy between an individual's income data held at the Australian Taxation Office with their self-reported income data at Centrelink. The first letter simply notes the discrepancy and gives an opportunity for the individual to explain it. This is not a debt letter.

On 20% of occasions, the recipient is able to validly explain the discrepancy in the data. In the other 80% of occasions, a debt notice is subsequently issued.

This is not an "error rate". This is the system as it was designed to work. Seeking information from welfare recipients when a discrepancy between Centrelink data and Tax Office data is identified is a longstanding practice undertaken by both Labor and Coalition governments.

If people receive a debt notice, they can ask for an internal review and provide new information at that point. They can also appeal to the Administrative Appeals Tribunal. That is, people receive 3 opportunities to validly explain a discrepancy.

A dedicated 1800 number can assist people at any stage.

The individuals who receive these requests for information have typically received thousands of dollars from Australian taxpayers. It is very reasonable to ask them to take a little time to go online and clarify their information if there is a discrepancy between Centrelink and Tax Office data.

The government will continue to refine the process, including by making changes to ensure that people have received the first request for information. We will also continue to refine the letters and online portal to ensure that they are clear, simple and easily understood.