Transcript: 5AA Adelaide, Interview with Leon Byner

24 January 2017

The Hon Alan Tudge MP

Minister for Human Services
Debt and compliance letters


Let's talk to the Federal Human Services Minister, Alan Tudge. Alan, good morning. Is this the feedback that you're getting?


Good morning, Leon. I do want to explain the system. Nobody should be getting, as their first letter, a debt letter.

So the system works where the first letter that a person gets is a request for information because there has been an anomaly identified between the income information which they self-report to Centrelink and the income information that the Australian Taxation Office has on them.


So Alan, how is it then that people would be getting a letter that says amount payable, though? I've got this stuff in front of me, so it's legit- …


[Interrupts] Yes, and I appreciate that. So typically, that will be at the third letter which comes through.

You'll initially get a letter requesting information.

The second letter would be one a reminder to say that listen, you've got this opportunity to update and explain the discrepancy, if indeed one exists.

If you can't explain the discrepancy or you don't respond, then you might get a debt letter.

Now, the issue has been that with some people, if they've moved address and they haven't updated their Centrelink file, then they may not have received that first letter, and consequently, down the track may be receiving a debt notice as their first letter.

Now, we're aware of that, and we're addressing that …


[Interrupts] How are you addressing it?


Basically by ensuring that in the future, we not only satisfy the legal obligation to send the letter out to the address on the Centrelink file, but we'll do that via registered mail.

We'll therefore know if people have picked up that mail. If that mail is not picked up, we'll send it to their electoral role address, and also by registered mail…


[Interrupts] So why wouldn't you have done that in the first place?


Oh, this has been the process which has always been done by Centrelink, and Centrelink were just following that normal process where they've got the legal obligation to send out the letters to the address which they have on the file.


Tell me about this algorithm where letters are generated by computer. How does that happen?


In essence it is a system which mirrors what has been occurring for many, many years across successive Coalition and Labor Governments.

And that is where you look at what the self-reported income information is to Centrelink, and you compare it with what the income information is that the Australian Taxation Office has on you, which is provided by your employers.

Where there is an anomaly between the two, a request for information is provided. Obviously you can do that in a more automated way these days, in terms of matching through databases.

Now sometimes, Leon, there is a valid explanation for why there's a discrepancy. Sometimes, for example, an employer has said that the person worked from June through ‘til December when in fact they've only worked from June through to September, and that makes a difference to the calculation.

When that is explained by the recipients, then the debt may not be forthcoming. But that's when, in all cases, there has been a discrepancy identified between that information which the person gave to Centrelink and the information which the Australian Taxation Office has.


The feedback that many listeners gave us yesterday was that in some cases where they're saying there's no debt, the other party, Centrelink, is saying well, we're going to send collectors out and reclaim the debt, and the person on the phone says well, hang on a minute; we don't think this debt is legitimate.

And it turns out to be that it's not.

So where is the quality control here?


So the person has several opportunities to explain a discrepancy.

Initially when they get this first letter asking for an explanation, they can go online and update their record.

Secondly, they also get an opportunity for an internal review. It's free of charge. They ask for a review to occur. They can provide new information at that stage.

Thirdly, even if they're dissatisfied with that review, they can also go to the Administrative Appeals Tribunal.

Again, that's a free process where you can provide more information.

So you've got three opportunities at any stage to update that information, and indeed, some people can validly explain why there is that discrepancy, but unfortunately there are many people who were overpaid, sometimes inadvertently.

There are cases where people did not declare a job, for example, which they had while they were receiving Centrelink benefits, or who did not declare their full income.

Some people deliberately defraud the system, unfortunately. Many people do so inadvertently, but this process which I'm describing, Leon, has been around for a very long time, where data is matched and then it's put back to the Centrelink recipients to say can you please explain that.


So you're telling us that this is often used as the term algorithm letter, of some 190,000. You're saying there's nothing unusual about this?


There's nothing unusual about the process of comparing the self-reported income information to Centrelink with the Australian Taxation Office income information. Now, that is …


[Interrupts] Let me ask you, why has this become so controversial, if it is as simple as you're explaining?


In part I think because obviously by doing it in a more automated way, more people can be checked than in the past.

When it was a very manual process, fewer people could be checked.

So I think that is part of the rationale.

I think Leon, to deal with that situation which I described before, if a person hasn't updated their address correctly, then they may not have received that first letter, and we're making sure that we fix that.

We want this system to be as fair and as reasonable as possible, but also to have this quality assurance that there is that check on ensuring that you've actually updated your claim correctly.


[Talks over] It seems to me, Minister, one of the problems you've got is that in doing this mass mail-out, you've had a situation where people have tried to automatically contact Centrelink, and they've had no luck or it's been too busy or nobody would talk to them, so what are they supposed to do?


At any stage, people can call up the dedicated 1800 number to discuss their situation, and people - I'd encourage people to do that even now if they feel aggrieved, they don't feel as if there is a discrepancy between the data or it can be explained.

Please call up that 1800 number, or go online and update your information.

Now, that 1800 number, in the last couple of days, you can get through almost instantaneously.

Overall, the call wait time is on average 10 minutes.

That means obviously sometimes it's a bit longer than that.

But certainly, in the last few days,

I've been checking myself. I've got through almost straight away.


[Interrupts] Alright. So how many of these letters have been sent out, and of those that have, what proportion have actually had a debt?


There’s over 200,000 letters, and there's been a bit under that in terms of assessments which have been completed and done.

Now, on 20 per cent of occasions, people have called up Centrelink or they've gone online and they've updated their information and no debt has been forthcoming.

In the 80 per cent of situations, people have not updated their information or have done so and a debt is still forthcoming.

And even in some of the more highly publicised cases, Leon, unfortunately some people had not properly declared their income and actually do owe a debt, even if they've gone out and publicly claimed that they did not.


So again, if people have got an issue, if they get a letter and they've got the information to show that they've done everything right - and some of the callers were in that position yesterday who shouldn't have had a debt, what do you do then?

You just report it back.


You report it back, and there's an online system whereby you can correct any anomaly which is on there, such as that example I gave before where you just put in actually no, I didn't work for the entire year, I only worked for that employer for those three months, and then that will sort out it, if indeed you were declaring your income correctly at the time.


So have you identified any shortfalls of this system where you've changed it to make it easier or fairer or better or more accessible?


We've put in a number of changes, and I described that one before in terms of ensuring that people do get that first letter.

That's critical, and that's very important that people get that opportunity.

We're just simplifying the language as well so that people know exactly what their rights and obligations are in those letters.

We're ensuring that the 1800 number is more visible on the letters and elsewhere so that people can call up at any time and try to get that reassurance from the person at the other end of the phone to walk them through the system.

And my discussions with the frontline Centrelink staff is once people have called up and they're talked through the process, then people generally are reassured.


Couple of things. We would like to be in contact with your office when we see what appears to be an anomaly that needs to be sorted out.

I think that's important so people are not falling foul of the system for a reason that's not their fault.

The other thing that was alleged yesterday - and it's not the first time it's been said - that so-called whistle-blowers in Centrelink have suggested that some of the things they're being asked to do are not exactly ethical.


The officials from my department put out a statement last week in relation to those whistle-blower claims, flatly denying them, and they went through each of the major five allegations and categorically denied them. And that was the senior officials from my department.


[Talks over] Alan, thank you for coming on today, and as I said, all we're interested in making sure is that people are treated fairly.

So we will continue to be in contact with your office, Minister, and hopefully we can sort some of these things out.