Robo-debt Continues to Haunt Individuals: The Problem Persists

Emma’s frustration has curdled into exhaustion. “Everyone I spoke to at Centrelink doesn’t dispute it’s an error, it’s just that it has to go through a formal review process that never seems to happen. If this happens to me every year, I will never be out of debt.”

She says her family are relatively well-off, but if the debts are not paused, then it affects how much she pays the childcare centre, as her fees leap from around $800 to $1200 a fortnight. The reason for this is Centrelink cuts or suspends the childcare subsidy for which her family’s eligible.

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“I’m educated, employed, healthy and a relatively wealthy person,” says Emma. “When you know it causes someone in my privileged position stress, gosh what it must be doing to people who are in a vulnerable situation.”

Emma has a friend who she says also owed Centrelink a debt after allegedly being overpaid for the childcare subsidy. Her friend paid the debt believing Centrelink’s letter. The next year, the friend received another Centrelink letter saying she owed another debt. Her children were not in childcare that year.

Emma’s social media post about her Centrelink debt prompted other women to share similar experiences, some just paid the debt even though they questioned it. Others had success in getting it resolved, but said it took up to two years.

Our own unsettling debt-hounding experience with Centrelink happened some years ago, and was resolved by us paying the amount. We never knew whether the debt was correct or not. Unfortunately, we still hear from Centrelink. This year they sent a letter estimating our family’s income as double what we actually earn. We have no kids in childcare.

There are many examples, including my neighbour, who has been sent similar debt notices and paid them. A busy professional, she gave up trying to work out if they were correct. “It was too hard,” she says. “You trust that they have done their due diligence.”

Services Australia, which manages Centrelink, encourages families to provide an income estimate but if they don’t, it will estimate their income for them. “We do this to reduce the risk of us overpaying families,” says Services Australia General Manager Hank Jongen.

The flipside to Centrelink overestimating a family’s income is that it could trigger a debt, which people then pay, when there may not truly be one. If a person pays that incorrect debt, then wouldn’t Centrelink be liable to refund them? Good luck with that.

The Robo-debt Royal Commission showed that the federal government can and does get it wrong. This month, the government took steps to fix the problem. It announced Centrelink call centres would get an additional 3000 staff as part of a $228 million funding boost, after millions of calls went unanswered.

It’s a move in the right direction. However, it will take more funding to end what has been a theatre of incompetence. Meanwhile, more notices will keep coming for some families. Who knows if they’re correct?

Anne Hyland is an award-winning writer and a senior correspondent for The Sydney Morning Herald and The Age.