Centrelink customers buried in robo-debt: We want answers

Customers have been left to prove they don't owe thousands, with one young mum growing frustrated over claims she owes thousands

Young mum Kahlia Payne, with her daughter Isabel, is frustrated with the process to challenge Centrelink debt.

AS A young mum to one-year-old Isabel, being thousands of dollars in debt is the last thing Kahlia Payne needs.

Just before Christmas, Ms Payne received a call from Centrelink informing her she owed $1800, after just spending countless hours unsuccessfully challenging a $2500 debt for not reporting her income properly.

Because Ms Payne closed her old bank account she can't provide statements dating back to 2010 to prove the debt wrong, and is now slowly paying it off.

She said she had always reported her income exactly as she was advised to.

"You've got to go through all this b------t to fight it, and in the end you end up paying it, doesn't matter what you do," she said.

"I have to sit down and work it out before I even get paid, to know how much I can spend on certain things.

"I think they need to stop and look at certain things. I get there are some people rigging the system, but they are doing this to people who have done exactly what they have been told to do."

Young mum Kahlia Payne with her daughter Isabel is frustrated with the process to challenge Centrelink debt. Picture: Tim Jarrett

A local primary school teacher, who did not want to be identified, has spent over a year fighting a $6,100 debt she incurred due to a Centrelink rule change that was implemented after she started receiving payments.

She was only on Centrelink for a short period, but a change in the way Centrelink divide customers pay into the weeks in a year, put her just over the income threshold.

This meant according to the system, she was being paid money she wasn't owed, because of a rule change she was never informed of.

"I went through the process of submitting each group certificate, then I had to go through and print off all my bank statements from 2015 to 2017."

"If they have changed the rules, that's their problem."

After taking the issues higher up in the department, she said there have been times it didn't seem worth it.

"I was just over it, I shouldn't have to worry about this, I haven't been on Centrelink for two and half years now," she said.

Now, the debt is on hold until April, while Centrelink workers go through the individual payslips she provided, and there is no way on knowing how much longer it will go on for.

NSW Council of Social Security CEO Joanna Quilty said unexplained debt was an issue with which thousands of Australians were struggling.

The issue came down to the automation of Centrelink's debt recovery system in 2016 - dubbed robo-debt, which had seen a huge rise in the number of debt notices sent out.

"It seems there is a flawed data matching process that is built in and that is resulting in these debt notices being sent in error and then the onus being put on the customer to prove it wrong," Ms Quilty said.

"An issue that is a big struggle for people on low income is that they don't have savings for emergencies, and if you're getting hit with debts of thousands that can push people over the edge."

Ms Quilty urged customers to do everything they could "to get the right outcome" but recognised it took "enormous resilience to deal with Centrelink".

"There are community legal centres, also financial counsellors people can speak to."

Originally published as Centrelink customers buried in robo-debt: We want answers