Likely to catch old age pensioners.
The Department of Human Services expects to save $980 million over the next three years by expanding its controversial “robo-debt” data matching process to capture more types of income.
Despite the criticism surrounding the accuracy of the program, DHS plans to push ahead with an expansion that will see assets and investments included in the data matching.
Since last September the DHS has been matching records of income provided to the agency with wages declared to the Australian Taxation Office to check for discrepancies.
From July 1, it will expand the program to cover rental income, interest on term deposits, dividends, and other assets and investments. The expansion has been criticised as unfairly targeting pensioners.
DHS representatives told a hearing of a senate inquiry into the program yesterday that the expansion was expected to reap $980 million over three years.
The agency said it made $70 million more than expected in the first year of the data matching drive.
The program has been criticised for its accuracy and heavy-handed approach. DHS officials yesterday admitted it was difficult to tell whether an individual had been employed in a financial year if specific periods of employment weren’t detailed by the ATO.
Once a discrepancy is identified between ATO and DHS records, the agency sends out an “initial clarification letter” – but what many who received the letters have taken as a debt notice – to prompt the individual to address the gap.
DHS said it was sending out around 10,000 of these letters per week.
However, discrepancies identified in the expanded dataset would be manually checked by DHS staff, the agency told the committee yesterday. Previously the “initial clarification letters” were automated.
Senate committee member and Labor senator Murray Watt called on the government to halt the expansion of the program.
“No one has been able to convince this inquiry that this system has been running so smoothly that we aren’t going to see a whole bunch of new problems emerge on July 1 with this expansion, with a particularly vulnerable group of Australians being older people,” he said.
He said while the agency had demonstrated improvements to the wider debt repayment program – including waiving 10 percent debt recovery fees and giving people more time to pay – it was still highly problematic.
“There are still very deep flaws and very grave doubts about the validity of the system and the government should put it on hold until it’s sorted out,” he said.