Joanita Wibowo

Retirement Income

"I'm being made out to be a criminal": Woman shocked by $8,000 Centrelink debt

"I'm being made out to be a criminal": Woman shocked by $8,000 Centrelink debt

Devi Barker has always paid her bills on time and kept her credit rating clean.

That was why the Tasmanian woman was surprised when she received a message from a debt collector in January claiming she owed more than $7,000.

“They were demanding that I make payment. I felt quite stressed, especially when they said that … my wages would be deducted, and that I wouldn't be able to leave the country,” Barker told 7.30.

The debt, which totalled to $7,616.05, was from a period dating from 2010 to 2012. While the Department of Human Services no longer raises debts dating back to this period following a review of the system, Barker’s debt still remains.

Barker maintained that the debt claim is false and asked Centrelink to review her case. 

“I recorded my hours in my uni diary and I was very diligent in reporting the correct hours, and I know that I don’t owe Centrelink any money,” she said.

However, contesting the debt turned out to be a challenge as it required bank records or payslips from employers, which could be difficult to obtain. 

“When I went to try and get bank statements from the bank they said that they don’t hold records for longer than seven years,” said Barker.

She is now being pursued by another debt collector.

“I feel like I’m being made out to be a criminal,” she said.

“It’s extremely stressful and especially when you can’t prove that you don’t have any debt. You have no power, and yet they’re still pursuing the debts.”

Barker is one of the many Australians who have received questionable “robo-debts” from the Department of Human Services’ automated debt recovery program.

Introduced by the Turnbull government in 2016, the scheme was aimed to crackdown on suspected welfare rorters. It sent out 445,000 debt notices from July 2016 to December 2018, but 17 per cent of those – or about 77,500 – were either reduced, waived or written off. Around 15,700 debts were reduced to zero.

Terry Carney, a former member of the Administrative Appeals Tribunal and an outspoken critic of the robo-debt scheme, described the conduct of the Department, which runs Centrelink, as “abysmal”.

He said apart from potentially hurting people’s credit rating and reputation, the scheme also puts the onus solely on the alleged debtor to prove that they do not have a debt.

“It’s the conduct that you would expect [from] a tinpot, third-world country,” said Carney.

“At no stage does Centrelink ever seek to defend the unlawful basis on which it’s raising those debts.

“[It’s] a bit like the Mafia saying, you know: ‘You owe me money. Do I have to prove that you owe me money? No I don’t’.”

The scheme is now facing legal challenges after Victoria Legal Aid launched two federal court cases against the validity of the automated debts raised against their clients.

“We’re asking a court to scrutinise the scheme and determine whether or not it is in fact lawful,” Victoria Legal Aid’s executive director Rowan McRae told 7.30.

McRae said her firm has helped more than 500 people who have allegedly inaccurate robo-debt notices.

"We know it’s unfair. We know it’s having a terrible impact on our clients. But we also think the scheme is unlawful and we’d like a court to test that.”