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Centrelink pursued disability pensioner for welfare debt caused by ‘administration error’

Posted in General

Debt was one of at least four given to Geelong workers with cognitive impairment who are unable to read or write

Fri 23 Oct 2020

Last modified on Fri 23 Oct 2020

Centrelink has been criticised for pursuing a disability pensioner living with a cognitive impairment over a $2,000 welfare debt he did not understand and that was caused by the agency’s own mistakes.

The community legal service that represents Mark* said the debt was one of at least four given to separate workers at an Australian Disability Enterprise (ADE) in Geelong. The majority of its employees live with cognitive impairment and are unable to read or write.

Mark works full-time helping to sort recycling and is paid a base rate of $4.71 to $5.10 per hour. He said he enjoyed the work which “gives me something to do instead of staying at home doing nothing”.

But in 2018, Centrelink sent him a letter for a debt worth $1,300, accusing him of failing to report wage fluctuations and bonus payments he received.

He said at the time he was “upset” wondering “why is it always me?”

“It’s been difficult for him to understand why he had debt in the first place,” said his lawyer, Mae Mactier, of the Villamanta Disability Rights Legal Service.

In June, the Administrative Appeals Tribunal ruled that although Mark had been overpaid, the debt was waived because it was caused by a “sole administration error” by Centrelink.

At the ADE where Mark works, which employs about 80 people, managers had a prior arrangement where they would send their workers’ pay information to a local Centrelink office.

The tribunal found that Mark’s employer had been sending his income details to Centrelink by email but Centrelink staff had failed to record the information.

Mark had a second debt worth about $700 waived after the initial win at the tribunal in June.

Centrelink has since waived the debt of one of Mark’s workmates, while Mactier said the legal service is also assisting two other employees to challenge their debts.

Mactier said the debts were worth about $2,000 on average.

Mark had just intended to pay his debts until the legal service learned that Centrelink was deducting money from his payments.

“We were assisting someone at the workplace with another legal matter and running that individual [through] their financial circumstances and it became clear they had a debt,” Mactier said.

“When we asked that individual about the debt, it became very clear that this was a widespread issue in that workplace. It’s quite likely that if that encounter hadn’t occurred, these people would have merely just continued having their debts upheld and their payments reduced.”

While Mark was paying off his debt, he would have to call the agency every three months to request a slower payment rate. Centrelink’s standard deduction is 15%. The base rate of the disability pension is $944.30.

When he asked for the deductions to be smaller, Mark said the agency would “always ask if I could go higher”. “I’m not a rich man, I’ve got other bills to pay,” he said.

Mactier said Centrelink needed to improve its processes to ensure there was better oversight of welfare debts issued to people like Mark.

“I think that the process really disadvantages people with an intellectual disability, especially for people that have limited support in their life,” she said.

“From understanding what’s happened with these matters, it seems that if further questions were asked at an earlier stage by Centrelink there definitely was an opportunity for the answers to be provided by individuals on the ground.

“That would have potentially prevented the debt from being raised, but also they might have waived it at the earliest stage.”

Mark’s debt was not a robodebt. But a Senate inquiry into the robodebt program last year heard how a man with an intellectual disability received no support from Centrelink after he was slapped with a $14,500 debt.

The case only came to light when the man raised it with his mother, who contacted a legal service.

Services Australia’s spokesman, Hank Jongen, said the agency assisted people working at ADEs to report income on behalf of their employees, though this was not usually done by email.

“Generally, when we identify that an overpayment has occurred for an ADE employee, we will consider the customer’s circumstances and exercise discretion under social security law,” he said.

“This could include waiving the overpayment.”

Jongen said the agency was committed to working closely with customers to “help them understand their appeal rights and make our decision-making processes as transparent as possible”.

*Name has been changed


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