Centrelink received 118,491 tip-offs from the public during the financial year 2005-6. This was an increase of about 20 per cent on the 95,570 tip-offs logged the previous year.
In the Senate on 27 February, 2007 then Minister for Human Services, Ian Campbell, advised that 8844 of the tip-offs received in 2005-6 had resulted in a reduction in social security payments. A further 2648 tip-offs had led to the cancellation of benefits.
He also revealed that 47,640 of the allegations of fraud were found to be baseless, and a further 5719 were considered too insubstantial or frivolous to even warrant investigation.
This accounts for only 64,851 of the 118,491of the tip-offs received. What became of the remaining 53,640 fraud claims?
Ian Campbell was not pressed for a breakdown, but he did explain that tip-offs are deleted from Centrelink’s system for several reasons. For example, if the subject of an allegation is already under investigation or is found not to be a Centrelink customer.
What remains a fact is that, during 2005-6, incorrect tip-offs from anonymous informers led to tens of thousands of people being subjected to the trauma of a Centrelink review. This usually involves a demand for the provision of pay slips, tax returns and bank and credit card statements dating back months or even years. Too bad if you don’t have these documents on hand.
Most banks now charge about $4 for a copy of a back statement, and Centrelink advises that its customers are responsible for accountancy and other costs they may incur. Furthermore, demands for documents usually come with the threat that social security payments will be cut off if the information is not provided before the expiry of a given 14-day deadline.
Centrelink is legally entitled to seek information about its customers from third parties, including employers. It advises, however, that it will only do so if it has to. Yet, when my husband and I were recently under investigation, we discovered that a Melbourne-based Centrelink compliance officer had sought copies of our pay slips from a number of casual employment agencies which had employed us over the years.
When we asked this officer why he had not first sought the pay slips from us, he said he didn’t think we would have them. We did. The same officer, mistakenly, logged our credit card debts as assets on our Centrelink records. Fortunately we quickly discovered his error by a fluke, and requested an immediate correction and written apology. Otherwise we might have found ourselves charged by both Centrelink and the Australian Taxation Office with failure to declare these presumed cash assets and the interest they would have accrued.
Back in February, Senator Campbell was asked how many of the 2005-6 convictions for social security fraud had been the result of tip-offs from the public (rather than investigations instigated by Centrelink’s own compliance officers). Mr Campbell said he did not have this information and could not justify the expense of obtaining it.
According to the latest Centrelink annual report, there were 2822 convictions for social security fraud in 2005-6. This was a reduction of more than 20 percent on the 3446 convictions recorded in 2004-5.
The conviction rate supports what the president of the National Welfare Rights Network, Michael Raper, has long protested that only a tiny proportion, a fraction of one per cent, of Centrelink’s 6.49 million customers resort to fraud. Those who are convicted are obliged by law to repay every cent, either in a lump sum or by installments as are social security recipients who have, for one reason or another, been overpaid.
Ian Campbell stated that the total amount raised in debt in 2005-6 as a result of overpayments was $1,684,900,000. The figure for 2004/5 was $1,886,800,000. Yet Mr Campbell went on to say:
These amounts are for the total amount of Centrelink debts (that is, not only tip-off debt) and include debts that are raised and immediately waived.
How many of these debts raised were immediately waived and why? According to the National Welfare Rights Network, Centrelink normally waives debts only when they have been raised in error by Centrelink’s own staff.
Centrelink has 25,000 staff and unprecedented licence to use data-matching and other technology to detect anomalies. The Howard Government has also proposed new ‘search and seizure’ powers for Centrelink officers which will enable them to enter private homes without notice to seek evidence of, say, the failure of women social security recipients to declare any additional income they might have received from live-in boyfriends.
Image from here
Successive governments, and particularly the Howard Government, have cynically sought votes and encouraged informants by sanctioning TV commercials which suggest that social security fraud is rife and might be increasing, and that hordes of dole bludgers are out there, taking advantage of hard working middle Australia.
Yet given Centrelink’s impressive resources, is it really necessary, let alone cost-effective, for the Government to continue to encourage us to become unpaid auxiliary compliance officers to hit the phone to the dob-in line the moment we have an inkling that a neighbour, colleague, ex-lover or acquaintance might be rorting the system?
It is mentioned in the Senate Hansard for February 27 that the cost of Ian Campbell’s responses to the questions on notice about Centrelink was $285 and had involved five hours and 21 minutes of research charged, presumably, at the rate of about $55 an hour. If the same amount of time and money had been spent investigating the veracity of each of the 118,491 tip-offs received by Centrelink last financial year, the outlay would have been about $300 million or about 0.05 per cent of Centrelink’s current annual expenditure of $63 billion.
Meantime, the receipt of a Centrelink payment, even an aged pension, seems to be increasingly regarded as a mark of failure. And who wants to admit to being under investigation by Centrelink? Certainly very few of the tens of thousands who were investigated last year as a result of ill-informed amateur gumshoes have gone public with a complaint.
We don’t often hear about the grief caused by the mistakes of Centrelink officers. A few months ago, however, pensioner associations referred the case of septuagenarian Gawler couple, Christine and Robert Hardwicke, to the media.
The Hardwickes immigrated from England in the 1960s and worked here for over 30 years. In 2000, when they applied for an Australian pension, they informed Centrelink that their income from other sources included a small combined British pension of about $37 a week.
Last year when they discovered that their British pension had been incorrectly logged by Centrelink as a monthly, instead of a weekly payment, they immediately contacted Centrelink’s Gawler office. Shortly afterwards they each received a demand for $4730.67 a total of nearly $9500 to cover overpayments dating back six years.
The Chairman of the British Pensions in Australia organisation, Jim Tilley, publicly complained about the stress this entailed:
It’s a shock to get a big bill out of the blue. It’s particularly devastating for elderly people on fixed incomes.
He argued that the debt should be repaid by the Centrelink officer responsible for the error. Another supporter, the President of the British Australian Pensioners Association, James Nelson, rebuffed the idea that the Hardwickes should have realised
years ago that they were being overpaid:
Most pensioners receive odds and ends of income from several sources. The Hardwickes correctly declared their income from all sources. It was up to Centrelink to correctly calculate what their entitlements should be.
With additional help and encouragement from the National Welfare Rights Network the Hardwickes eventually succeeded in having most of their combined debt waived, but the matter took a tribunal and over eight stressful months to resolve.
Even more perplexing is the case of the Sydney nonogenarian an Australian World War II veteran who reportedly has had his aged pension cancelled. According to his 82-year-old sister, this was because he recently commissioned a surveyor to draw up plans for the subdivision of the large block of land on which his home stands. She explained that her brother was planning to bequeath the subdivided block to his nephew, her son, who is in his sixties. The three have lived together in the old family home for decades.
‘We don’t know how Centrelink came to know of all this,’ says the sister. Her brother was informed that the estimated value of the subdivided block of land had rendered him ineligible for the aged pension.
‘But we’re only rich on paper,’ his sister protested. ‘We tried (unsuccessfully) to get the land re-incorporated into our family block. We can’t sell up now and move at our age. We couldn’t face it.’
She now shares her aged pension with her brother and reports that he is very depressed about losing his independence. She has asked that their names not be published, but I have permission to pass on contact details to anyone with the influence to discreetly investigate this case without causing the family further stress.
Donate To New Matilda
New Matilda is a small, independent media outlet. We survive through reader contributions, and never losing a lawsuit. If you got something from this article, giving something back helps us to continue speaking truth to power. Every little bit counts.