When Liam*, a man from Sydney, first received a message from Centrelink informing him of an outstanding debt, he thought he was being scammed.
He was confused by the ‘brutal’ and ‘insensitive’ tone of the text, he told news.com.au
The message read: “You need to start paying the money you owe to stop the daily interest charges.
“Set up a payment arrangement now using the Centrelink Express Plus mobile app or your Centrelink online account via myGov.”
Although the text is not a scam, Liam did not realize he was linked to Covid JobSeeker and the Disaster Relief Payments he received during Covid.
After logging into his Centrelink account, he found an overpayment notice dated May 2020 for $550. A day later, he received a second notice with a notice of debt for $121.86, dated May 17 to May 20, 2020. In total, this meant he owed $671.86, with the debts subject to daily interest charges.
Announced on March 22, 2020, the federal government launched an additional $550 bi-weekly coronavirus supplement for new and existing JobSeeker payment recipients, doubling JobSeeker’s maximum payment rate.
Liam also accessed additional Covid-19 disaster payments that supported workers who were affected by public health orders that affected their ability to work.
‘I had been traveling overseas and then Covid hit so I rushed home,’ he told news.com.au.
“Everyone was freaking out and things were on hold, so I definitely wasn’t going to work anytime soon.
“I’m not someone who likes to be in situations where I’m not on my own, but this was a situation where I didn’t want to rely on them but definitely had to.”
Although Liam has since paid the overpayments, he remains confused as to what led to the debts. Although the report says his “employment income (was) incorrectly coded or reported”, he believes he was meticulous in recording his income.
“The second I found a great job and started getting paychecks, I reported it, and the payments stopped soon after,” he says.
“I thought I had done a little and never heard of being overpaid.”
A telephone inquiry to Centrelink about a payment failure also failed to answer Liam’s questions.
“When I asked for a justification, all that (the Centrelink employee) could tell me was that the system had calculated that I was overpaid and that was the only reason given to me. given.
“There was no overview of when I started reporting my payroll and when payments from Centrelink stopped.”
Mum’s fury at Centrelink reviews
Now working full time, Liam was able to pay the combined debt of $671.86 in full. Despite this, the initial text left him shocked, panicked and stressed by the potential amount. This was even though he was sure he had declared his winnings correctly.
“I’m just lucky enough to get out of it, but I would be concerned about people who are in dire straits. It’s been a tough time,” Liam said.
Having attended the first Sessions of the Royal Robodebt Commission in Brisbane, Queensland wife Kath Madgwick criticized Centrelink’s automated debt notices.
In 2019, she lost her 22-year-old son to suicide the day after she received a $2,000 debt letter while applying for Centrelink benefits. At the time, he was frantically looking for a job, his unemployment exacerbating his pre-existing poor mental health.
Speaking to news.com.au, she says she is exasperated that these practices are “continuing”.
“There’s a duty of care when you’re dealing with some of the most vulnerable people in society,” she told news.com.au.
“People on Centrelink are fighting to get through every day and you have your cohort who have learned to manage (the system) and then you have people coming into the system, like Jarrad was.
“In this case, someone should have understood that he had no income and that it was not the right time to issue him an automated debt notice.”
Ms Madgwick wants to make the case for a system where Centrelink is able to track ‘red flags’ which mean they need to ‘use caution’ when a debt notice comes.
This could include known mental health issues and employment and income checks (to ensure they are able to pay a debt). This way, people who needed help could also be referred to relevant community outreach programs or financial assistance services and programs.
Centrelink: ‘Pause on debt collection is lifted’
In a statement to news.com.au, a spokesperson for Services Australia said the government agency “has been gradually resuming debt collection since July this year, since the Federal Government implemented temporary pauses scale on debt raising and collection activities”.
They also pointed out that if someone receives an overpayment notice, they don’t have to repay the amount all at once and they can set up a “payment agreement and repay it over time.”
People who have been affected by natural disasters can also arrange flexible debt repayment options.
Centrelink criticized for weak increase in social benefits
In the biggest increase in JobSeeker payments in 30 years, the maximum fortnightly benefit increased by $1.80 a day to $668.40 for one-person households, $718.60 for single-parent households and single households over 60, and $608.70 USD for couples. That roughly equates to $48 per day.
Acting chief executive of the Australian Council of Social Services (ACOSS), Edwina MacDonald, criticized the meager increase for staying “well below the poverty line and just 42 per cent of the minimum wage”.
“An extra $1.80 on an already grossly insufficient income will not cover the costs of winter energy bills, high fuel prices, medicine, groceries or rent,” Ms MacDonald said in September.
“We speak regularly to people who can’t eat three meals a day, who can’t afford essential medicines and who are in debt to their utility provider because they can’t cover the cost of energy. .”
Instead, she led calls for JobSeeker to be increased to $73 a day.
“It doesn’t bring a real increase – an increase above inflation – and that’s what people on JobSeeker and other payments need to keep a roof over their heads and put some food on the table,” she said.