Debt. Re­cov­ery.

The Monthly (Australia) - - THE NATION REVIEWED - ALEX MCK­IN­NON

In Oc­to­ber last year, Phoebe re­ceived a text mes­sage telling her to check her old my Gov email in­box. There, she found three let­ters from the Depart­ment of Hu­man Ser­vices (DHS), in­form­ing her that Cen­tre­link had over­paid her to the tune of $14,576.

It was the first Phoebe had any idea she may have a Cen­tre­link debt at all. She had not re­ceived any cor­re­spon­dence ad­vis­ing that her wel­fare his­tory was be­ing re­viewed,

or ask­ing that she clar­ify her in­come. But her con­fu­sion was only just be­gin­ning. In her words to a pub­lic Se­nate in­quiry in Syd­ney, “I have learned a lot about Cen­tre­link since then.”

Two weeks af­ter re­ceiv­ing the text mes­sage, she was con­tacted by the Dun & Brad­street debt-col­lec­tion agency. Phoebe claimed that the debt col­lec­tor, un­de­terred by her ex­pla­na­tion that she was sub­mit­ting her case for re­view in the be­lief the DHS had made an er­ror, threat­ened to dock “at least a third of [her] fort­nightly in­come” un­til the debt was paid and de­manded a min­i­mum on-the-spot pay­ment of $500. Pan­icked and in­tim­i­dated, Phoebe com­plied, mak­ing the pay­ment on her credit card.

Phoebe es­ti­mates she spent “prob­a­bly 100 hours, if not more”, try­ing to prove she did not owe the debt – a process frus­trated at ev­ery turn by Cen­tre­link’s opaque, bu­grid­dled and in­fu­ri­at­ingly com­plex debt-re­cov­ery process. Doc­u­ments sub­mit­ted through the my­Gov on­line por­tal were swal­lowed up, never to be seen again. Phoebe turned up at her lo­cal Cen­tre­link of­fice to sub­mit doc­u­ments in per­son, only to be told she could only do so through the on­line por­tal. When she tried again, the por­tal had some­how ceased to ex­ist – a van­ish­ing act only solved af­ter hours spent lis­ten­ing to Mozart’s Di­ver­ti­mento in F Ma­jor (K138), Cen­tre­link’s in­fa­mous hold mu­sic.

The debt-col­lec­tion agency con­tin­ued call­ing her while the DHS re­viewed her debt, threat­en­ing to gar­nish her wages and de­mand­ing up-front pay­ments. When she asked Cen­tre­link to tell Dun & Brad­street her debt was un­der re­view, she was told: “The debt’s on­sold; we can’t get it back off the debt-col­lec­tion agency now.”

Even­tu­ally, af­ter Phoebe chased up old payslips from past em­ploy­ers, hired an ac­coun­tant and re­searched her le­gal rights when deal­ing with debt col­lec­tors, her debt was re­duced to $8000, which she still be­lieves she does not owe. Cen­tre­link cal­cu­lated her debt by av­er­ag­ing out her yearly in­come over pe­ri­ods when she was work­ing full-time and not re­ceiv­ing ben­e­fits, as well as a six-month span where she dropped out of univer­sity for health rea­sons.

Hun­dreds of sto­ries like Phoebe’s have sur­faced since the gov­ern­ment’s “robo-debt” au­to­mated wel­fare debt re­cov­ery sys­tem be­gan is­su­ing no­tices in Novem­ber. From March to May, the Se­nate Com­mu­nity Af­fairs Ref­er­ences Com­mit­tee heard from more than 60 com­mu­nity and so­cial work­ers; le­gal-aid rep­re­sen­ta­tives; dis­abil­ity, youth, mi­grant and Abo­rig­i­nal and Torres Strait Is­lander rights ad­vo­cates; and 25 wel­fare re­cip­i­ents with out­stand­ing, con­tested or set­tled debts. Many more made sub­mis­sions, with most choos­ing to re­main anony­mous or sub­mit con­fi­den­tially. As the in­quiry’s fi­nal re­port con­cluded, they paint a pic­ture of a badly de­signed, poorly im­ple­mented and deeply un­fair sys­tem that has had “a pro­foundly neg­a­tive im­pact on the lives of thou­sands of Aus­tralians”.

Robo-debt’s flaws are many, but the crux of them is that it out­sources the work of es­tab­lish­ing the ve­rac­ity of a debt from DHS em­ploy­ees to in­di­vid­ual wel­fare re­cip­i­ents. The gov­ern­ment’s ra­tio­nale for do­ing so was fi­nan­cial, cit­ing “im­proved em­ploy­ment in­come and non-em­ploy­ment in­come data match­ing” as a vi­tal part of bud­get re­pair. Fed­eral hu­man ser­vices min­is­ter Alan Tudge claimed the shift would claw back $1.9 bil­lion in wel­fare over­pay­ments over four years, “[al­low] peo­ple to re­pay Cen­tre­link debts in a cou­ple of clicks”, and “[free] up skilled staff to fo­cus on iden­ti­fy­ing and re­cov­er­ing more sig­nif­i­cant debts or fraud­u­lent ac­tiv­ity”.

That it did. Freed from the time-con­sum­ing process of check­ing the ac­cu­racy of debts be­fore is­su­ing them, DHS em­ploy­ees now had time to deal with the in­creased num­ber of debt no­tices to send out, which sky­rock­eted from around 20,000 a year to up to 20,000 a week. Mean­while, the drudge­work of call­ing up em­ploy­ers to track down old payslips and tax in­voices was hand­balled from a work­force of paid pub­lic ser­vants to an army of un­paid wel­fare re­cip­i­ents – a vast press-gang­ing that, in Tudge’s words, “[put] the in­di­vid­ual rather than the ser­vice provider at the heart of the dis­cus­sion”.

Com­pound­ing that cen­tral prob­lem was the al­go­rithm used to cal­cu­late so-called debts in the first place. Robo-debt av­er­ages out a per­son’s yearly in­come into fort­nightly earn­ings, thus pro­duc­ing in­ac­cu­rate re­sults for any­one whose weekly pay, em­ploy­ment or study sit­u­a­tion has changed at all in the course of a year. An agency that rou­tinely works with ca­sual work­ers on fluc­tu­at­ing hours, peo­ple slid­ing in and out of short-term em­ploy­ment, and stu­dents fin­ish­ing, chang­ing or drop­ping out of de­grees some­how failed to an­tic­i­pate that a one-size-fits-all al­go­rithm might not fit its clien­tele. The Se­nate in­quiry found around 20% of all debt claims is­sued by the DHS since Novem­ber were quickly dis­missed, while not­ing the Aus­tralian Coun­cil of So­cial Ser­vice’s as­sess­ment that “we cer­tainly do not know how many peo­ple have en­tered into agree­ments to re­pay debts that they did not owe” out of fear, in­tim­i­da­tion, or not be­ing will­ing or able to chal­lenge their debt.

Ge­off, a 67-year-old bus driver, told the in­quiry’s pub­lic hear­ings that he re­ceived his debt no­tice a day be­fore go­ing into surgery for a heart con­di­tion, and had to sub­mit a Free­dom of In­for­ma­tion re­quest to un­der­stand the process Cen­tre­link used to cal­cu­late his debt. In his words, he got back “a thick wad of pa­pers” that amounted to “to­tal gib­ber­ish”. Tom, a qual­i­fied ac­coun­tant who con­tested a fam­ily mem­ber’s debt no­tice, found Cen­tre­link’s cal­cu­la­tions to be “pure Kafka”. Michelle, who tes­ti­fied in

Ade­laide, was told by a Cen­tre­link worker to set­tle her case via the phone sys­tem, de­spite the fact that she is deaf. Outof-date my­Gov de­tails saw debt no­tices is­sued to peo­ple who had died.

The Se­nate com­mit­tee re­port is filled with tes­ti­mony from peo­ple who had the time, re­sources and con­fi­dence to speak in front of a par­lia­men­tary in­quiry. Other sto­ries are even more har­row­ing. The web­site #NotMyDebt has col­lated more than 500 un­of­fi­cial com­plaints and claims of in­ac­cu­rate or non-ex­is­tent debt, rang­ing from the out­raged to the des­per­ate. One father claims his 21-year-old son was forced into agree­ing to pay back $18,000 by a col­lec­tion agency, and quickly amassed fur­ther debt from tak­ing out short-term loans with high-in­ter­est lenders – a phe­nom­e­non the in­quiry noted was com­mon among young, fi­nan­cially vul­ner­a­ble peo­ple. His par­ents only found out when they “found a Pawn­bro­kers ticket for a $300 loan against his watch”.

A dis­turb­ing num­ber of #NotMyDebt sub­mis­sions men­tion de­pres­sion, anx­i­ety and se­vere men­tal-health con­di­tions be­ing ex­ac­er­bated by the robo-debt sys­tem. “Tired of this sys­tem, sui­cide is a com­mon thought,” reads one. “I once even wrote a sui­cide note that men­tioned the gov­ern­ment can have their wish, they can take this money from my cold dead hands,” says an­other. The in­quiry also found wide­spread ev­i­dence of such de­spair, es­pe­cially among peo­ple with pre-ex­ist­ing fi­nan­cial, med­i­cal or cul­tural vul­ner­a­bil­i­ties.

By con­trast, the Coali­tion Sen­a­tors’ Dis­sent­ing Re­port, from the gov­ern­ment’s two com­mit­tee mem­bers, Linda Reynolds and Jonathon Du­niam, is a mas­ter­class in ob­fus­ca­tion and eu­phemism. On most of its flaws – the mass co­er­cion of un­paid labour, the cir­cling of debt col­lec­tors, the need­less fear and un­cer­tainty – the gov­ern­ment is adamant that there has been no fail­ure. “Coali­tion Sen­a­tors recog­nise that there are el­e­ments of the cur­rent wel­fare sys­tem in­tegrity process which are be­ing fur­ther im­proved, clar­i­fied and mod­ernised,” their as­sess­ment reads. In the most tech­ni­cal sense of the word, “im­proved” is cor­rect, in that be­lat­edly recog­nis­ing and less­en­ing the im­pacts of a rolling dis­as­ter can be de­scribed as an “im­prove­ment”.

In an oth­er­wise bel­liger­ent re­port, it’s easy to miss the dis­senters’ grudg­ing cen­tral con­ces­sion, that send­ing out au­to­mated debts with­out hu­man over­sight has not worked:

DHS ought to draw upon all in­for­ma­tion avail­able to it, to both ver­ify the cal­cu­la­tions made by DHS and re­duce the re­quire­ment for re­cip­i­ents to seek in­for­ma­tion held by var­i­ous Com­mon­wealth author­i­ties which can also be ac­cessed by DHS.

That re­al­i­sa­tion, at least, ap­pears to have dawned at Cen­tre­link. One of the in­quiry’s big­gest con­cerns was the prospect of the pro­gram be­ing ex­panded. In June, Cen­tre­link an­nounced it would not use the au­to­mated debt re­cov­ery sys­tem to tar­get aged pen­sion­ers, and be­lat­edly be­gin hir­ing more per­ma­nent staff to cope with the work­load of man­u­ally check­ing more dis­crep­an­cies flagged by its ex­pand­ing data-match­ing pro­gram. The gov­ern­ment nev­er­the­less main­tains that its debt re­cov­ery sys­tem needs only tech­ni­cal and ser­vic­ing tweaks.

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