Centrelink Debt Recovery 2GB
E&OE
CHRIS SMITH:
I want to return right now to the growing issue of welfare rorting in Australia. Some of the figures on this subject are rather staggering, but the Federal Government is now vowing to extend its program to recover $4 billion in welfare debts from almost 2 million Australians who may have incorrectly received benefit payments. Now, remember this is taxpayers’ money. 169,000 welfare recipients have received letters since the start of this financial year, allowing the Government to recover $300 million. Of those people, around only 276 complaints have been received – so that’s point- 16 per cent. But the Government and Social Services Minister Christian Porter has in the last 24 hours, been forced to defend the programme, with a small percentage of people claiming they’ve being incorrectly targeted. And there are calls, of course, from the Opposition to end the debt recovery process entirely.
Social Services Minister, Christian Porter, joins me on the line from Perth. An unearthly time for you right now but thank you very much for your time, Minister.
MINISTER PORTER:
I have a young baby, so there’s no sleep.
CHRIS SMITH:
Yes, I know that very, very well. Who needs sleep? Just to explain to my listeners how this system works. You’ve sent letters to 169,000 welfare recipients, but there, they aren’t debt letters. They’re advising them of discrepancies, right?
MINISTER PORTER:
That’s right. They’re letters seeking information to explain a discrepancy, and the discrepancy is a fairly simple one. We cross-reference information that has been provided to the ATO, and obviously generally from employers about how much a person earned in a year period, and then we cross-reference that against how much that person themselves have indicated to Centrelink that they’ve earned in that yearly period. And where there’s a discrepancy, we, through the new system that we have, send a letter simply and plainly asking for information from the person that explains that discrepancy. So the first letter that goes out is not a debt letter, it’s certainly not threatening, and a process follows whereby the person can go online or use the assistance of Centrelink officers to explain the difference.
CHRIS SMITH:
But you’ve scared the willies out of some people: 276 complaints. Of those complaints, how many were founded?
MINISTER PORTER:
Well what measure we use is essentially in how many instances where we start a compliance action, in how many instances does that end up in the raising of a debt payable to the Commonwealth. And in about 80 per cent of the instances it ends up in a debt payable to the Commonwealth, which is where that $300 million so far, comes from. In the other 20 per cent of occasions the discrepancy is explained fairly simply, again usually by people going online and providing the explanation as to why that discrepancy exists, that’s between the ATO information and the information they provided to Centrelink, and the matter it doesn’t proceed.
CHRIS SMITH:
And that’s been happening?
MINISTER PORTER:
Absolutely, and in a sense that’s been happening for many years, it’s simply that this Government is very serious about making sure that taxpayer money is spent properly and in accordance with the rules. And so we have developed and evolved the existing compliance check system, which was done manually, so that we’re able to run more compliance checks at a higher rate, which is what’s happening here. But the fundamental basis of the compliance check has always been the same, that we cross-reference what you say to Centrelink with what other information we have and what employers have told the Government about how much a person’s earned in a year.
CHRIS SMITH:
Okay, so is there any problem with this automated approach? Because there have been complaints that Centrelink was mistakenly averaging a welfare recipient’s annual income over 26 fortnights to conclude that benefits paid during part of the year should be repaid. Is that model flawed?
MINISTER PORTER:
No. In fact, the question that we ask is about the total amount that has been earned in a relevant period. So whether it’s a calendar or a financial year, we simply put to the person that in the relevant period that they were receiving Centrelink payments they told us, i.e. Centrelink that they earned this much, the information from the ATO for the same period says that they earned a different amount, and then we ask for the difference to be explained. So that issue doesn’t arise. That’s not to say, of course, that there aren’t, as I noted, a range of instances where people go online and they explain the discrepancy. So, and an issue that’s arisen in a couple of matters where employers have been cited differently by the ATO, and that’s been considered by Centrelink in the automated system to be two different employers, it was actually just different descriptions of one employer. So the person receives the letter, they go online, they explain that, the matter ends. But the notion that Labor has put out there, that because of the fact that some people are able to explain the discrepancy, which we fully expect, that we should stop this process is, I’ve got to say, on the edge of ludicrous.
CHRIS SMITH:
So you’ve received this ludicrous letter from Linda Burney, have you?
MINISTER PORTER:
That’s gone to Alan Tudge. Of course, that’ll come to me as well. Look, the proposition that because a person might be inconvenienced by having to go online and provide information to explain a discrepancy, that we should stop a process that recoups so far $300 million of hard-earned taxpayers’ money back to the taxpayer, or indeed that we should stop now and prevent ourselves from raising $4 billion over the next four years, I mean, it really is on the edge of one of the dumber things I’ve heard.
CHRIS SMITH:
$4 billion over four years. Scott Morrison will be including you in his Christmas card list from now on, won’t he?
MINISTER PORTER:
Well all this money has been included in our budget estimates over the next four years.
CHRIS SMITH:
It’s a hell of a lot to make out of nothing, out of nowhere in any portfolio.
MINISTER PORTER:
But it’s not being made out of nowhere. I mean, it should’ve been done more stringently under the previous government, but they didn’t do this.
CHRIS SMITH:
I can’t believe that 2 million people may have received payments they’re not entitled to.
MINISTER PORTER:
Well we have a broad and deep and generous welfare system, and the system is always one that is of mutual responsibility, and the fundamental mutual responsibility is to ensure that the information that you provide Centrelink around your income and your assets is accurate and updated accurately on a timely basis. And that is the fundamental lynchpin of the mutual responsibility in the system, and that has to be observed. So we think that when you’ve got very difficult budgetary circumstances that we inherited from Labor, where they left us with deficits as far as they eye can see, that you have to do absolutely everything that you can to ensure that you’re spending money in strict accordance with the rules. And where money has gone out the door other than in strict accordance with the rules, you’ve got an obligation on the part of taxpayer to find those instances and recoup the money, and what that means for us is seeking information from people. And in many instances the information shows that there’s not a problem, we move on and the matter ends, but in 80 per cent of the instances it shows that there was an issue.
CHRIS SMITH:
I’m curious as to how an asylum seeker on a temporary visa, an Afghani, was caught up in all of this. He was issued with a $2000 debt notice. How does that happen?
MINISTER PORTER:
Well look, I haven’t seen the individual issue that’s arisen in that case, but in general terms that will be a similar problem that arises in a whole range of other areas, which is that it is income tested. So you are able to earn a certain amount of money on a range of payments, whether they be Newstart or other payments. You’re able to earn a certain amount of money, and up to a point there is a taper rate at which you start losing welfare payments because you’re earning over the threshold, what’s known as the income-free area. So whether you’re an asylum seeker or an Australian on Newstart, if you earn over a certain amount then your welfare payment starts to reduce. And if, for some reason, whether that’s inadvertence or something more than inadvertence, you have underestimated or under-reported your income to Centrelink, the possibility exists that you were being paid more than you were entitled to. Now, where we find those instances and discrepancies we seek an explanation and if the explanation is sound then it doesn’t proceed. If an issue has arisen, a debt is raised against you. But where there is a debt of $2000, or $1200, or $1800, there are time to pay arrangements that are entered into. So it’s not as if Centrelink doesn’t take into account individual circumstances and demands money back straight away. That’s either deducted from your ongoing welfare payments in a way that is manageable for you. Or indeed if you are no longer inside the welfare system you can still enter into time to pay arrangements.
CHRIS SMITH:
Yeah, well I can probably tell you, and you know this, that most taxpayers would be waving the flag in your direction and suggesting you’re doing a very, very good job in making sure that our tax dollars are being used efficiently. Thank you so much for your time this morning.
MINISTER PORTER:
It’s a pleasure Chris, cheers.
CHRIS SMITH:
There you go. Social Services Minister Christian Porter.