The first Elsa Hoggard heard of her Centrelink debt was from a debt collector threatening legal action if she failed to pay up.
In letters sent to her former address and which she therefore never received, Centrelink alleged Ms Hoggard had misreported her income from 2010 and owed over $500 in supposedly misappropriated benefits.
Ms Hoggart is one of many casual workers whose annual incomes appear to have been distorted by the federal government’s automated debt recovery system.
When Ms Hoggard failed to respond to Centrelink’s debt notice, the government agency then referred the $554 debt to debt collector Dun and Bradstreet, including a $23 recovery fee.
The debt collector continued to harangue Ms Hoggart through Christmas with weekly phone calls and letters, she said.
“I was completely thrown out, at first I thought it was a scam,” Ms Hoggart, who estimated she received fewer than five fortnightly payments from Centrelink over six years go, said.
“Because it’s been escalated they can’t cancel the debt at this stage so I’m still getting harassment from the debt collector and I’ve actually said I refuse to give you any money.”
Erik, who did not wish to use his full name, said a Centrelink employee suggested he sign up for New Start after he told them he was unable to afford the $3,200 debt.
He was told by a Centrelink representative at 7.30pm on Thursday night he had been charged in error.
“I’m relieved but I’m not satisfied, I’ve lost my Christmas.
“She pretty much just said, ‘I’ve had a look at your case and you’re spot on, it’s clear that you do not owe a debt’ and I said ‘I know that, I knew that from the beginning’.”
Because it’s been escalated they can’t cancel the debt at this stage so I’m still getting harassment from the debt collector.Elsa Hoggard
Erik said he felt for people who had been unable to challenge their debt.
Courier readers have reported paying their debt – some as high as $4000 – out of fear of further action or to avoid having to dredge up years-old payslips for multiple casual jobs.
Dun and Bradstreet was unavailable for comment.
The federal Department of Human Services is yet to respond to requests from The Courier for comment.
Debt recovery inaccurate says Legal Aid
Centrelink is using debt collectors like never before and making snap decisions based on “limited information” since the introduction of a new automated debt recovery system, Victoria Legal Aid has said.
Collectors have been used by the government agency before but never based on such an “inaccurate and blunt” system, Civil Justice, Access and Equity executive director Dan Nicholson said.
The Courier has sighted a letter from Sydney-based debt collector Dun and Bradstreet which threatens legal action or the docking of wages or tax refunds if the debt remains outstanding.
“Although debt collectors have been used to collect Centrelink debts previously, what is different now is that initial decisions are being made quickly and on limited information, meaning that for some people the first they hear of the problem is from a private debt collector,” Mr Nicholson said.
Legal Aid has called on the government to immediately suspend the automated system, which is being criticised for distorting people’s incomes and generating false debts.
“This blunt and inaccurate system of data-matching is affecting people in every community of Australia, including Ballarat.”
Nathan Guest said he set up a repayment plan out of fear after he was issued with a $6,290 Centrelink debt for the 2013-2014 financial year.
He said he immediately contacted the agency, which insisted he go on a payment plan, initially suggesting that he pay back $150 a week.
So far he has paid back $400 of his alleged debt at $50 a week.
“It was more a fear thing because they said you could go to jail or incur further debt,” Mr Guest said.
If you believe you’ve been incorrectly issued one of these letters, I advise you to get free legal advice from Victoria Legal Aid or other organisations around Australia.
Advice from Legal Aid Victoria:
You can visit the Victoria Legal Aid website (www.legalaid.vic.gov.au) for more information about how to go help, or call our Legal Help telephone service on 1300 792 387.
Even if you don’t have all the information Centrelink asks of you, we advise you to respond to the letter, so you are able to push your side of the story.
If you are unhappy with Centrelink, you have the right to complain at any time – either to Centrelink or the Ombudsman.
Has this happened to you? Contact firstname.lastname@example.org.