FTB debts dwarf robo-issues
A review has heard Centrelink hit at least 21,000 families with bogus Family Tax Benefit debts last year.
Of 65,000 demands for payment sent by Centrelink in November 2016, 21,400 of the families have been able to prove they owed nothing.
But the true rate of bogus debts could be even higher, as the Department of Human Services (DHS) does not record how many families believed the letters and simply paid the money.
The Family Tax Benefit recovery effort is separate to the controversial 'robo-debt' data-matching scheme.
DHS has made a submission to an inquiry into the matter saying it wrote to 260,000 FTB recipients who had not filed a tax return, asking them to update their affairs “or advise the department that they do not need to lodge a tax return”.
“Not all people responded to the departmental letters, as 65,000 debt notices had to be raised in November 2016,” Human Services said.
“Of these debt notices, 33 per cent were then changed to zero dollars as the individual responded with further information once they had received the debt notice and a reassessment was able to be undertaken.”
It said that the rate of incorrect FTB debt letters was much higher than those of ‘robo-debt’.
“By contrast to the FTB scenario above, only 3.5 per cent of 130,000 online compliance debts raised from July 2016 to January 2017 were later reduced to zero dollars,” the submission reads.
DHS says the trouble could have been avoided if its clients would engage in the process earlier.
“The department has listened to feedback and made refinements to not only the content of the letters, but also how they are delivered to recipients to ensure recipients receive the letters,” the submission reads.
“Improvements have also been made to how recipients access the online portal as well as its readability and functionality.”
Labor's Human Services spokesperson Linda Burney says “something is going terribly wrong at Centrelink”.
“It is clear from the Department's own submission that those issues aren't just real, they are well known to the Minister and to Centrelink,” she told reporters.
“It is deeply concerning that many more people may have simply paid these alleged debts because they were intimidated by the process.
“This system is broken and it is everyday Australians paying the price.”