Centrelink loses more than one third of debt cases appealed to tribunal

More than one third of Centrelink welfare debt recovery cases that are appealed to the independent tribunal are overturned.

The Administrative Appeals Tribunal has set aside 960 Centrelink debt decisions out of 2,699 appeals lodged between March 2016 and March 2017, while a further 132 were “varied”.

The majority of the decisions are likely too early to relate to the government’s controversial “robo debt” measure but Guardian Australia understands tribunal members are concerned about the looming workload caused by the government’s use of the automated system.

“There’s a lag time there with the robo debts specifically … you’re looking at a minimum of six to eight months [until they appear in the tribunal],” one tribunal source said. “We’re all suspecting that there is going to be some kind surge but it hasn’t come through yet.”

The automated debt recovery system has drawn criticism from welfare organisations and is subject to an ongoing Senate inquiry.

The figures were obtained under freedom-of-information laws from the AAT. A decision by Centrelink can be “set aside” for a number of different reasons. An analysis of published AAT decisions shows that this can include incorrectly calculating debts, as well as waiving debts on the grounds that they would cause the Centrelink recipient serious financial hardship.

A “varied” decision can also mean that part of the debt was waived, set aside or incorrectly calculated. The data shows a steady rise in decisions from January 2017.

In 2015-16, the number of all Centrelink matters – not just debt decisions – set aside or varied by the tribunal was 22%.

The National Social Security Rights Network said the high rate at which the tribunal was setting aside or varying debt decisions was surprising.

The network’s executive officer, Matthew Butt, said the complexity of the welfare system meant errors were to be expected but said Centrelink must do more to ensure people understood debt decisions and were given the information needed to quickly assess their accuracy and fairness.

“More generally the data shows the importance of free, accessible appeal rights,” Butt said. “Although a majority of Centrelink decisions are affirmed on appeal, a significant proportion are changed or set aside entirely. In many cases this is to the benefit of the individual.”

The Australian Council of Social Service’s chief executive, Cassandra Goldie, said the figures further underlined the need for human involvement in debt decisions.

“We do not know how many of these were robo debt cases but our firm view is that, without human involvement in the detection and calculation of debts, mistakes will be made and there is a high risk that people will pay debts they do not owe,” Goldie said.

“The government must only issue a debt notice if it has solid proof that a debt exists and that it is accurate. This is not the case under the robo debt program and is why it must be stopped immediately.”

Figures cited by the Department of Human Services during the Senate inquiry suggest only a small amount of tribunal cases so far relate to the automated debt notices. For the 2016-17 financial year, as at 28 February 2017, 106 people have lodged an application at the Administrative Appeals Tribunal for a review of an Online Compliance Intervention decision.

Under social security law, a welfare recipient who receives a debt notice has 13 weeks to seek a review of the decision internally. If they are still unhappy with this decision they are then able to challenge it in the first tier of the AAT’s social security division.

These hearings are held confidentially and are often informal in order to expedite cases. Some hearings can be public in the event they are appealed to the second tier of the AAT review system.