Wednesday, 27 November 2019
Matters of Public Importance
Pensions and Benefits
I'm pleased to contribute to today's matter of public importance debate in relation to the perceived values of the Centrelink compliance program, but firstly I would like to speak about the income compliance process itself. This process compares the information provided by a person to Centrelink with the income reported to the Australian Taxation Office from paid employment. Based on this information, Centrelink makes an assessment and contacts the individual, alerting them that there may be a discrepancy, if the information received does not align. It should be noted that no debt has been raised at this point. This contact is simply a query from Services Australia asking the person to explain why the income they declared to Centrelink is different from the income declared to the Australian Taxation Office.
It is also important to note: the outcome of every income review is decided by a compliance officer—humans, not robots, have always been involved in this stage of the income compliance process. Minister for Government Services and for the National Disability Insurance Scheme, Stuart Robert, has assured us that at no point while he's been the minister has there been a time when departmental staff were not involved in the process of raising a debt. In around 20 per cent of cases, where a recipient has received such a notice, the discrepancy can be explained through provision of further information such as payslips or bank statements. In other cases, however, there are debts raised. I note that, in cases like these that have then gone on to be formally appealed, less than one per cent of them have actually been overturned.
Once a debt has been confirmed, people have 28 days to either pay the outstanding amount in full or enter into a repayment plan in order to avoid having interest applied to their debt. Services Australia takes into account an individual's financial and personal situation when working out a repayment plan to ensure they do not experience hardship. This is one reason that I and my colleagues have always strongly urged anyone receiving either the initial discrepancy letter or subsequently a debt notice to contact the department on the number indicated on their letter to discuss their personal situation.
The coalition government made a commitment to refine the income compliance program and we remain responsive to community feedback. Refinements have been made a number of times over the past few years, both before and after the Commonwealth Ombudsman's report. We have listened to concerns about the current system, and indeed over recent months I have been at public hearings on this very issue around the country so I understand the implications of this discussion.
Last week the Minister for Government Services announced a further refinement of the income compliance program. These changes will make the program more robust by requiring additional evidence when using income information to identify potential overpayments. This means a debt will no longer be raised where the only information the department is relying on is the averaging of ATO income information.
The government has a responsibility to collect any overpayments. Any fiscally responsible government would be required to do this. Compliance activity will continue for past and future welfare payment recipients where there is a reason to believe they have been overpaid. As outlined earlier by Senator Hughes, in the past the department has asked people to explain discrepancies to them. Under the changes, if someone does not respond to these requests, they will use more information to help them confirm whether or not they have a debt. For those debts raised to date, which the department calculated solely through income averaging, debt recovery will be frozen and the debt will be reassessed with additional information.
Australian taxpayers foot the bill for around $111 billion in social security payments each year and rightly expect those engaged in the welfare system to receive the amount of support for which they are eligible—nothing more and nothing less. We know that those opposite cannot manage money and may think it insensitive or inappropriate to recover overpayments when they occur. However, I agree wholeheartedly with the minister that the government has a legal obligation to raise debts where they exist.
The average Australian expects us to use their funds wisely. They expect the government to ensure that the right people do get the right amount of welfare at the right time. We make no apologies for ensuring we are meeting our legal obligation to the Australian people and we do not stand back from requiring that the correct recipients receive the correct amount of money. If anybody has been overpaid, then they should repay that money. This expectation is a central premise on which the community's trust in the administration of this safety net is based.
The integrity of our welfare system is important and Australians, rightly, expect us to honour that trust. As such, we will maintain the government's dedicated focus on returning overpayments to taxpayers. We balance this requirement with fairness and transparency in our compliance activities. As is their right, people can ask the department to review its decisions or provide additional information at any stage of the process. The Ombudsman found this process indicates a reassessment process that is functioning as it should.
The key message here is that it is the responsibility of those receiving welfare payments to ensure their income is up to date. If there are any changes to income, no matter how seemingly minuscule, the onus is on the individual to keep the department informed. This is the best way to minimise any chance of incurring a debt down the track.
On the matter of the class action that was brought before the Federal Court by income compliance complainants last week, obviously we cannot discuss particulars while this matter is before the court. However, I will reiterate some points the Attorney-General made at the time. He reminded us that the case is an issue that relates to a group of people, the exact number of which is unknown, who were sent a notice to respond to the department. As was explained earlier, this notice was based on data income matching and asked the recipients to explain the discrepancy. These people did not engage with the department.
The legality of the government's income compliance scheme was underpinned by internal advice given to the department at the time it was developed. The advice received and acted on was actually similar to the data-matching advice that was conducted by the Labor Party when it was in government. On the subject of the Labor Party's own record when it comes to income compliance, we have heard several examples earlier today of their support.
The government does not apologise for requiring people receiving welfare payments to pay back money if they have received more than they were entitled to. If the debt assessment has been calculated incorrectly, the department will work with the recipient to rectify the discrepancy. This process is ongoing and may well be refined again over time. It is what the community expects a strong government to do—a strong government that has a track record on strong economic management and providing support to those who need it when they need it. It is a strong economic track record that has delivered tax cuts, is supercharging our record investments in infrastructure and is keeping our budget strong, despite the challenges our economy has been experiencing.