Bendigo MP Lisa Chesters believes Centrelink’s new automated debt recovery system could unfairly target people in regional areas due to poorer communication services.
Over the Christmas period, she said she had been contacted by several welfare recipients in central Victoria who had their payments incorrectly suspended by the new system, designed to crack down on welfare fraud.
Centrelink can now automatically cross check records with the Australian Taxation Office to detect overpayments, and sends letters requesting an explanation within three weeks.
It has raised $300 million in overpayments for the government following 169,000 reviews.
But Ms Chesters said it was a flawed system that failed to take into account a number of factors for those living in regional areas.
“Over the Christmas period I was contacted by several people who had their payments suspended. For most of them it appeared to be no fault of their own,” she said.
“Quite often people do not know they have to attend an appointment because appointment letters have not arrived before the scheduled appointment or a text message telling them to attend an appointment, they attend only to be told no appointment exists.
“Days later their payments are suspended for a ‘failure to attend’.
“It's unfair to suspended a payment if you don't know you have to attend an appointment.”
Several instances of incorrect recovery attempts have been reported in Australia over the Christmas period, including one woman who was informed she owed Centrelink $24,000.
The revelation led Labor to call for the system to be suspended.
Since September this year, more than 70 per cent of people who received a compliance letter have resolved the matter. Of those, 97.8 per cent did not need to provide supporting documentation.
Centrelink previously relied on manual checks to find those rorting the system.
The Coalition government has defended the automated approach, claiming there had only been 276 complaints out of the 169,000 reviews.
Human Services Minister Alan Tudge said rorters will be tracked down.
The data matching techniques used to detect Centrelink fraud were also applied to people receiving other government payments, such as pensions and student payments.
- This article first appeared on the Bendigo Advertiser