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MEMBER for Bendigo Lisa Chesters is calling for the federal government to completely suspend its automated Centrelink debt recovery system until it can work through a backlog of investigations.
Her office has received at least 100 calls from central Victorian concerned about their debt recovery letters since they started arriving in letterboxes towards the end of 2016.
The automated system was first announced by Labor in 2011, and Ms Chesters said the party still supported efforts to recover debt owing from Centrelink recipients “in principle”.
But she said the Coalition’s attempt to privatise the debt collection process, and then deny there were issues, demonstrated a “difference in the approach”.
“The one thing that Labor does is admits when there’s a mistake,” Ms Chesters said.
“There’s a problem with the system, it needs to be suspended and audited because too many innocent people are being caught up in this.
“If there was a part of the system designed under Labor that was wrong, then we’re big enough to say ‘suspend it’ and let’s sort it out.”
Human Services Minister Alan Tudge announced plans to alter the program earlier this week after a community backlash. Welfare recipients will now be able to launch an internal review before they are forced to start making back-payments.
The letters will also be sent by registered mail.
Mr Tudge had earlier denied there were issues with the system, and said it was working “as it was designed to work”. The system involves automatically cross-checking Centrelink data with the Australian Taxation Office.
The Bendigo Advertiser spoke with a number of central Victorians last week, who each claimed to have been incorrectly billed for Centrelink debts.
Ms Chesters said there needed to be changes.
“To outsource Centrelink debt to debt collectors is pretty rough, but then to discover that the algorithm they used is flawed and is targeting innocent people just screams that the government needs to suspend this program until it can be fixed,” she said.
More than three million elderly and disabled Australians will be the next target of the “robo-debt” campaign, according to figures published in the mid-year economic forecast.
The forecast showed the government has booked savings of $1.1 billion from data matching the aged pension and another $400 million from the disability support pension.