What should you do if you get a Centrelink debt letter?

For the past few weeks, their phone lines have been jammed almost constantly.

Graham Wells, principal lawyer at Social Security Rights Victoria, which provides legal advice and help for people battling various Centrelink complaints, says the organisation has been run off its feet in the wake of the debt-recovery saga plaguing the agency over the summer break.

Centrelink has faced a storm of criticism over its automated data-matching system, which has hit almost 170,000 people with notices that they owe the agency money.

On Tuesday, Social Services Minister Christian Porter admitted one in five people who received one of those letters did not owe a debt.

"In 80 per cent of instances the debt is repayable to the Commonwealth, in the final 20 per cent of instances the matter is resolved, generally speaking, by people simply providing information online," Mr Porter said.

But Mr Porter defended the system, saying it was working well and the complaint rate was running at just 0.16 per cent.

"[There have been] only 276 complaints out of 169,000 letters, and that process has raised $300 million worth of money back to the taxpayer," he told ABC Radio on Tuesday.

He has not said how many were disputed.

Independent MP Andrew Wilkie on Wednesday referred the matter to the Commonwealth Ombudsman.

Mr Wells said his organisation, which provides free assistance to social security recipients thanks to a small army of volunteers, had been "incredibly busy" fielding calls from people distressed at being told they owed the government money.

While he said he didn't have access to the data relied on by the department, Mr Wells said, "anecdotally, I'd have to say, most of them [the letters] have got problems".

So what should you do if you get a letter saying you owe the department money?

Mr Wells says in the first instance, people suspecting their debt assessment is incorrect should go to their nearest Centrelink office, the MyGov website or, "if you're willing to chance it, on the phone", and ask to have their debt reviewed.

Delegated decision makers within Centrelink, called Authorised Review Officers, are authorised to review department decisions on behalf of the minister. They might decide the debt does not exist, is correct, is too low, or is too high.

This can take between two and six months but Mr Wells suggested that, to speed things up, people could regularly call Centrelink to check on the matter, or go to their local MP and make regular representations there.

Mr Wells said if people were still not happy with Centrelink's internal decision-making processes, they could make an application under Freedom of Information laws for the department to release the documents it holds on their supposed debt to them.

"You want to be as specific as possible," he said. "Ask for all documents it holds relating to this debt between this and that date."

Debt collection agencies employed by Centrelink to recover debts have been applying a 10 per cent fee to recover debts related in inaccurate reporting.

"I think it's wrong; I think it's very entrepreneurial on their part," Mr Wells said.

It is, however, legal - although Mr Wells said consumers challenging their debts often had the 10 per cent fee set aside.

Mr Wells suggests that anyone faced with demands from a third-party for repayments go to their local post office and make the smallest repayment they can afford directly to Centrelink, to cut debt recovery agencies out of the loop. He said if it was later found their debt was invalid, Centrelink should return the money.

Finally, people can apply to the social services and child support division of the Administrative Appeals Tribunal, which can review Centrelink decisions that have first been reviewed internally.

Victoria Legal Aid executive director of civil justice Dan Nicholson urged anyone who received a letter from Centrelink they believed to be incorrect to get free legal advice from Legal Aid or other organisations across the country.

"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," he said.

"If Centrelink does make a decision that you disagree with, such as you have a debt, I encourage you to challenge the decision – and you have a very good chance of success."

Internal Centrelink figures show that before the agency introduced its debt recovery system, 37.5 per cent of its decisions were revised after internal reviews.

The story What should you do if you get a Centrelink debt letter? first appeared on The Sydney Morning Herald.

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