The debt collector alleged that we had been overpaid on the childcare subsidy that we received. The subsidy is the way the federal government assists families with childcare fees that often cost as much or more than that of private high schools. The government assistance also means it gets more parents,particularly women,into work.
Families report they are being pursued by Centrelink over “debts” the agency claims they owe because they were overpaid a subsidy that assists them with childcare fees.Dionne Gain
We queried the debt. Would Centrelink explain how the debt had been calculated? Had the parameters changed for eligibility? It seemed to us the debt was a mistake. After weeks of frustrating phone calls and emails to Centrelink that went unanswered,we gave up,and paid the money as it was a few hundred dollars.
I was reminded of that experience when I read a social media post last month by a woman called Emma,who I later contacted. For the past year,Emma has been fighting with Centrelink over claims she owes it two debts tallying more than $10,000 for being overpaid the childcare subsidy. The problem for Emma is that those “debts” allegedly owed to Centrelink are calculated,she says,on a fictitious family income.
Emma’s family is one of many currently having this experience,even as the federal government announced this past week that it was adopting the 56 recommendations of the Royal Commission into the robo-debt scheme,which was originally set up by the Abbott government.
She says that in the first year she was told she owed money,her family’s income was estimated by Centrelink to be double what it actually was.
Australian Tax Office staff confirmed to Emma that her family’s income figure matched their records and was correct,and Centrelink’s was wrong. But after a year of phone calls and emails to Centrelink it wouldn’t budge,even after she furnished the agency with her family’s tax records.
Centrelink would only pause the debt it claims she owed,placing it in review. It’s been a year now since that review began,with no outcome. Now,to multiply the toxicity of the situation,she’s been issued a second debt.
Emma’s frustration has curdled into exhaustion. “Everyone I spoke to at Centrelink doesn’t dispute it’s an error,it’s just that it has to go through a formal review process that never seems to happen. If this happens to me every year,I will never be out of debt.”
She says her family are relatively well-off,but if the debts are not paused,then it affects how much she pays the childcare centre,as her fees leap from around $800 to $1200 a fortnight. The reason for this is Centrelink cuts or suspends the childcare subsidy for which her family’s eligible.
“I’m educated,employed,healthy and a relatively wealthy person,” says Emma. “When you know it causes someone in my privileged position stress,gosh what it must be doing to people who are in a vulnerable situation.”
Emma has a friend who she says also owed Centrelink a debt after allegedly being overpaid for the childcare subsidy. Her friend paid the debt believing Centrelink’s letter. The next year,the friend received another Centrelink letter saying she owed another debt. Her children were not in childcare that year.
Emma’s social media post about her Centrelink debt prompted other women to share similar experiences,some just paid the debt even though they questioned it. Others had success in getting it resolved,but said it took up to two years.
Our own unsettling debt-hounding experience with Centrelink happened some years ago,and was resolved by us paying the amount. We never knew whether the debt was correct or not. Unfortunately,we still hear from Centrelink. This year they sent a letter estimating our family’s income as double what we actually earn. We have no kids in childcare.
There are many examples,including my neighbour,who has been sent similar debt notices and paid them. A busy professional,she gave up trying to work out if they were correct. “It was too hard,” she says. “You trust that they have done their due diligence.”
Services Australia,which manages Centrelink,encourages families to provide an income estimate but if they don’t,it will estimate their income for them. “We do this to reduce the risk of us overpaying families,” says Services Australia General Manager Hank Jongen.
The flipside to Centrelink overestimating a family’s income is that it could trigger a debt,which people then pay,when there may not truly be one. If a person pays that incorrect debt,then wouldn’t Centrelink be liable to refund them? Good luck with that.
The Robo-debt Royal Commission showed that the federal government can and does get it wrong. This month,the the problem. It announced Centrelink call centres would get an additional 3000 staff as part of a $228 million funding boost,after millions of calls went unanswered.
It’s a move in the right direction. However,it will take more funding to end what has been a theatre of incompetence. Meanwhile,more notices will keep coming for some families. Who knows if they’re correct?
Anne Hyland is an award-winning writer and a senior correspondent forThe Sydney Morning Herald andThe Age.