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The Great Centrelink Debt Fiasco

March 12, 2017

How did this happen?


I’ve been getting asked a lot of questions about Centrelink recently. ‘Why is this happening?’ ‘What were they thinking?’ ‘How did they manage to cock this up so badly?’ The reason they’re asking me is that long before I was a blogger, before there even were blogs, way back in another lifetime called the 90s, I was a Social Security officer. And not just that. I was also a union delegate, chair of the Victorian delegates committee, and a National Councillor with the CPSU. And, most pertinently, for over a year I was a data matching officer. So I know the system, I know what’s gone wrong, and I feel I should explain. My past has collided with my present, because this calls for a Babel Fish translation.

Before I do that however there’s something else I need to deal with. A fellow blogger writing on this subject, Andie Fox, has had her personal information released to the media in order to, it was claimed, ‘correct the record.’ She has responded here. This claimed ‘legal right to correct the record’ does not exist. This was unethical, immoral and highly illegal. I am intimately acquainted with the privacy provisions of the Social Security Act (1991). They drummed them into us in basic training. Later, in my capacity as a union delegate, I was obliged to represent a member wrongly accused of a privacy violation. Here’s how it works: It was (and remains for those still working there) illegal for us to access any information, whether computer records or paper files, that we were not required to access for the purpose of doing our jobs. It was (and remains, etc) illegal for us to disclose to any third party any personal information whatsoever that we’d learned in the course of our work. It was very much a ‘need to know’ policy. We couldn’t even discuss cases with our colleagues if they didn’t need to know.

Let me give you an example of that in action. At one point I had a new car. Well, new to me. I’d had it for a couple of weeks. One morning I found a park right outside the office. That was unheard of. I took it as a good omen. I thought it was my lucky day. I was wrong. A couple of hours later, while I was working in the back office, I was informed that someone had hit my car and driven off. It so happened that some of my colleagues, who were out the front having a smoko, saw the whole thing. The culprit was a client. He had just left the office. Two of them knew his name. Both of them spoke to me, described the incident, and one discreetly slipped me a piece of paper with a scribbled SSR (Social Security Reference No.) on it, saying, “You didn’t get this from me, ok?

By this time the police had been called, and the next thing that happened was that the regional manager came flying out of his office to admonish us that we couldn’t tell those police officers anything that we had learned in the course of our work. So my witnesses could tell them his registration number, because they saw that during the incident, but not his name, address or anything that could identify him which they only knew because they knew him as a client. One of them had been talking to him just five minutes before, but couldn’t discuss that because it had taken place over a DSS desk. The police had to have official permission even to come through the door (Centrelink offices are Commonwealth premises, state police forces have no jurisdiction there), and I was then obliged to tell them that although I knew exactly who the culprit was, I couldn’t tell them anything except the registration number of his old shitbox Kingswood panel van, which (they later informed me) turned out to be registered to a two dollar shelf company.

I never got to recover those damages, and I just had to suck that up. Which is how I know that what the minister, Alan Tudge, and anyone in the department who assisted him in releasing this blogger’s personal information, has done constitutes a serious criminal offence. An offence that carries a maximum prison sentence greater than 12 months. He could go to jail. But a conviction, even if he escapes jail time, would disqualify him from being an MP. To call his actions foolhardy would be an extreme understatement. Now I, like the majority of Australians, have a Centrelink file. I will not, however, be discussing anything pertaining to that here. Unlike most, I also have a history of employment in DSS, the predecessor department to DHS. I will be discussing only non-confidential, systems-related information I acquired in the course of working there.

All of my personal information is, like everyone else’s, confidential. I really shouldn’t have to say that, but due to what has happened to Ms. Fox, I feel it is necessary to deny here any permission, explicit or implied, for the minister, or any officer of the department, to access any information about me. As I said, I understand the requirements of the privacy provisions. I have held myself to that standard, as the above story demonstrates. And you may be assured, I will hold you to that standard too. If I catch so much as a whiff of any unauthorised information about me finding its way into the public domain, I will insist on a full scale privacy investigation, and when you are caught, as you will be (because all access to the computer system is identifiable by a unique logon ID), I will insist on your prosecution, to the fullest extent of the law. You have been warned.

Now, to return to the matter in hand, some will say well, this was twenty years ago, the system must have changed a lot since then surely. Well, no actually. The basic software architecture that underpins the main social security system (including one of the largest databases in the country by the way) hasn’t changed in well over forty years. It was old and creaky when I was using it, and it’s positively antiquated now. Really it belongs in a museum, but on the other hand you’d have to say it’s proved remarkably robust, as by and large it still does the job. It still processes the transactions that have to be processed and pays the people it’s supposed to pay. Mostly.

The ATO computer system (another massive database) is also functionally obsolete by the standards of whatever device you’re reading this on now. The key to working with such systems is to have a good understanding of what they can and cannot do. One of the important things they can’t do is talk to each other. They were designed as one-off, unique, stand alone systems. It was never envisaged that they would be required to talk to each other. If you find that strange remember, when they were designed it was never envisaged that the year 2000 would arrive. Or (arguably) that they would still be in service when it did.

Anyway, in the 90s it was decided that being able to compare data on various government computer systems would be a good idea, and I.T. people from some of those departments were tasked with working out how to do it. To their credit they did work out a way, and the next question became ‘what are we looking for?’ So they worked out various things that could be cross-checked. These were called ‘Match Keys.’ Between DSS (now Centrelink) and the ATO (this is where it becomes relevant to the current debt fiasco), one of these Match Keys was a simple comparison of income. It works like this – the computer looks for discrepancies between ATO annual assessed income and annualised total DSS-declared fortnightly income.

Now, I have to explain what I just said, and why it is a blunt instrument. The ATO assesses income on an annual basis. July 1 to June 30. They don’t care when, within that financial year, you earned the income. Their computer system only knows how much you earned for that whole financial year. The DSS system knows how much, if anything, you earned during any fortnight that you were eligible for a payment from them. It’s not hard to simply add that up for the financial year, and arrive at an annual figure for DSS-declared income. It’s not hard, but it’s highly misleading. I’ll explain why, and also why it wasn’t a problem until now.

Why it’s misleading, why it’s a blunt instrument, is because it will throw up a match every time those two figures differ, and that means every time someone wasn’t in receipt of a DSS/Centrelink payment for the entire financial year. Yes, that’s right, not joking, if you worked for part of a financial year, and at another time during that year you claimed a Centrelink payment, you will be matched. And with the ever-increasing casualisation of the workforce, that’s a lot of people these days. Let’s look at a hypothetical example. If you’re not one of the dwindling minority with a job for life, you might have to take the odd temp job, maybe even a few casual days when they come up. So let’s say in the financial year in question you have a couple of temp positions, a three month one and a two month one. In between them you claim Newstart Allowance, but you also do some casual work, the income from which you declare on your fortnightly forms, as you’re supposed to. Later in the year you score a permanent job, but after a couple of months you get sick. You haven’t had time to accrue much sick leave yet so you have to take unpaid leave, and claim Sickness Allowance for a month or so.

Now, doesn’t that sound like a reasonably common scenario in today’s workforce? You’ve done nothing wrong. You’ve only claimed payments you were entitled to. You’ve declared all the income you were required to declare, to both the ATO and Centrelink. But Centrelink has a total figure of the income you declared to them (which was just for the casual work you had while you were on Newstart), whilst the ATO has that figure, plus the total of Newstart and Sickness Allowance payments you received, plus the income from your three periods of full time work. Obviously those two figures are going to be very different. Congratulations! You just tripped a Match Key!

Now, if this had happened prior to 2016, chances are you’d never have known about it. So what’s changed? It’s not the Match Key. That is, like the old computer system itself, self-evidently the same one I was working with in the 90s. No, what’s changed is that until last year someone like 90s me, a ‘Data Matching Officer,’ would have received a big pile of computer printouts (dot matrix, oh yeah, high tech) and checked them. The old-fashioned way, using what military pilots like to refer to as the Mark 1 Eyeball. We’d look at them. First we’d eliminate the 10-15% that were clearly just two different people with similar names (no, I feel like I’m saying this a lot, but I am not joking). The next thing we looked for was people who were not receiving DSS payments for the full financial year. We generally binned those ones. Because the obvious explanation – that they earned the additional income in the periods they weren’t on benefits – was the correct explanation 99 times out of 100. That’s a little thing called Occam’s Razor. The simplest explanation is usually correct. The Match Key does not take account of Occam’s Razor. Which is why I advisedly referred to it as a blunt instrument. 😀

But it was never designed to be used without the human checking part of the process! And that is what’s changed. They’ve removed that checking process, the job I used to do, and instead started writing automatically (unseen by human eye) to everyone with a match. Which is, frankly, crazy. So the obvious question is, “Why?” Why would they do such an idiotic thing? Here I can only resort to conjecture, but I have a few observations which may help to shed a little light. Firstly, this is absolutely a political decision. I know this because no-one in the department, no-one with any actual experience of the data matching system, would ever suggest such a ludicrous idea. I suspect someone in the minister’s office has seen the headline figure for this Match Key (which, it turns out, is about $4 billion), and got all excited about it. But it’s not there! It is a hypothetical figure that tells you how much would be owed if all the matches represented genuine discrepancies (which most of them don’t) and if all that money was recoverable (which it wouldn’t be). Only about 2% (not 80%, as still claimed by the government) of them represented genuine discrepancies, so the $4 billion is really more like $80 million. Which would have been recovered anyway! It would seem the ministerial staffers didn’t grasp this. Or did they?

The less charitable explanation is that they knew perfectly well that most of the matches weren’t legitimate, but cynically decided to pursue all of them anyway, in the hope that many people would simply believe the information sent to them in an official looking government letter, and pay up. There is considerable evidence beginning to emerge that this has indeed happened in many cases. This has been assisted by their hopelessly inadequate and opaque review process. However, if that’s what happened, then it was always a risky gamble. It was relatively cheap, in terms of staffing, to pre-check these matches so that only genuine discrepancies were pursued. It will cost a great deal more to review them all. And of course there was always the chance that the whole thing would come out, and become a massive embarrassment. Which it has. I think that just about wraps it up for the minister. His position has become utterly untenable. Bye bye Mr Tudge!


If anyone reading this has been affected by this issue, and you have any questions, please leave a comment below and I’ll do my best to answer them. If I don’t know the answer, I’ll do my best to find out (I still have some contacts in the department).

  1. margaret PEARSON permalink

    Excellant explaination. Will you or anyone you know be putting in a submission to the senate enquiry about this.?


    • Hi Margaret. In the course of researching what others had said about this, I did come across one retired officer who has put in a submission, and said much the same as I have. I did draw the attention of an old union buddy of mine to it. He’s now an MP, so I expect if they think I can add anything, I’ll be getting the call.


  2. Wow, what a superb article! It describes the problem exactly as it happened to me. I was unemployed for 8 months, went on Newstart for 4 of those, then got work (and off Newstart) for 4 months. They concluded that the most likely explanation for my having an annual income was that that 4 months of work was spread over the year, including the period I was on Newstart. So their preferred story for what happened was that I was working all year, then thought I’d have a dip at Newstart for 4 months, (presumably lying about my job search) then I went off it back to their fictitious fortnightly income.

    Wasn’t the 4 billion needed by the government to prevent some rating agency from downgrading Australia’s rating?

    I do hope the AFP don’t let Tudge’s misuse of data go unexamined.

    Do you have any insights as to why Centrelink was refusing bank statements as proof of income?

    You know, I think I got pinged twice – once for an employer who gave the whole FY as my period of payment, when I only worked for them for 4 months. The other employer gave the date of signing of a contract as my start date, but I didn’t start for two months after that. I imagine the second one would have triggered a match that wouldn’t have been binned immediately. Luckily I had paysheets which showed what happened.

    In your experience, how often did you see employers lazily giving the whole FY (1Jul-30Jun) as the period of payment, when the actual period was much shorter? (In my case 24 Feb-30Jun).

    Hey, can I ask you to seriously consider making a submission to the Centrelink Senate Inquiry? Your insights and explanations would be very valuable. You could largely base your submission on your post here. Your description of how human oversight would have largely removed most of the false debts is just as I guessed, but here you are speaking from experience. Please do make a submission. I’m making one myself.

    Thanks for speaking up!

    Sorry about your car. What a dick that guy was.


    • Sorry for the delay in posting your comment Andrej, for some reason wordpress thought it was spam and I’ve just found and retrieved it. It does sound as though your situation was exactly the sort of thing I was thinking of. Given the incorrect dates provided by your employers, it probably would have required some further investigation. In my day that would have involved firstly a phone call to yourself (for those raised entirely in the digital age, it’s amazing how many things you can sort out with a phone call), then a follow up call to the employers to get the exact dates worked. Sometimes they’d be uncooperative, and we’d have to explain to them that we had the legal power to compel them to give us the information, and that if it wasn’t accurate they’d be liable for making a false declaration. You’ll see the warnings against that on any Centrelink form, and they apply just as much to employers as to anyone else.

      When I first came to Australia I worked for nine months for the ATO, and based on that experience I’d say inaccuracies on the part of employers are fairly common. One of my jobs there involved forcing them to issue group certificates for people making early returns (because they were leaving the country for instance). Most companies like to issue their group certificates all at once at the end of the financial year, however tax law says they must be issued within 14 days of termination.

      Wasn’t the 4 billion needed by the government to prevent some rating agency from downgrading Australia’s rating?

      You know, that rings a bell. If they could ‘book’ it they could improve the budget bottom line by that amount I suppose. It’s a terrible way to treat people for the sake of what is basically an accounting trick though.

      I do hope the AFP don’t let Tudge’s misuse of data go unexamined.

      As I said to another commenter, if I was him I’d be more concerned with the internal investigation. I’ve dealt with those guys, and they take no prisoners. Plus they know the computer system inside out, have total access, and I expect they already know exactly who accessed Ms. Fox’s record, when, and what they looked at. Those people can expect a knock on the door very soon from a couple of people with a ton of attitude and a triple deck tape recorder (or the modern equivalent). I would advise them to contact their union reps immediately.

      Do you have any insights as to why Centrelink was refusing bank statements as proof of income?

      Not entirely sure on that, possibly because you might have another bank account?

      As far as the Senate enquiry is concerned, there are obviously a number of people who have the same knowledge as I do, at least one of whom has already made a submission. However I forwarded this article to a man called Stephen Jones, who was the Industrial Officer for DSS in the CPSU while I was chair of the state delegates’ committee. We once started an industrial dispute together back in the day. I went off to be a musician, he went on to lead the union, and is now the Member for Whitlam. So if they think I can add anything, I’d be happy to make myself available.


  3. Margaret Lynn permalink

    THANK YOU, WHAT HAPPENS NOW? Also is it true that those on disability pensions are assessed on their earnings annually at tax time? I had trouble over twenty years ago with the ATO holding my tax return to pay child support for a child in Adelaide that does not exist! After complaining all day the cross referencing discovered an indicator against my name that was incorrect and then removed. Unbelievable incompetence!


    • Well, as to what happens now, there are now three separate investigations under way – there’s the Senate enquiry, which is looking at the whole issue, plus two privacy investigations, one by the AFP and one by the department’s own privacy investigators. If I was the minister, it’s the last one I’d be most worried about. The privacy investigation team operates pretty much autonomously within the department, has total access to everyone’s login records, and they know exactly what they’re looking for.

      All Centrelink pensions and allowances including DSP are income-assessed fortnightly. It’s only in retrospect that they can come up with these annualised figures. This entire problem, plus your difficulties with the non-existent child, would seem to have been caused by people trusting computers too much and ignoring one of the first principles of data processing, the GIGO principle – Garbage In, Garbage Out.


  4. Lionel permalink

    Thankyou for that it is happening to me I worked in aged care for about five months lost that job through burnout working double shifts so I went on Centrelink about a month and a half I found a job in aged care and left Centrelink straight away doing double shifts and working public holidays caring for the elderly been on and of with work ever since I got a bill of 1321dollars I rang Centrelink it took eight phone calls plenty of stress I had to send them my payslips well I have kept my payslips I don’t have a computer so I had to take them to Centrelink to get them copied then ring them in a week when orang them the girl said I look looks like you don’t owe them anything well then I get told they can’t read them so they said I had to get all payslips again (waist of time so now I give up they are useless Centrelink) this was five years ago i did this work now I have gone from full time work recently to now trying to get on sickness benefits with depression and so Iam stuffed I don’t know what to do I give up i might be homeless very shortly thankyou trudge you turd


    • Lionel, I hope you see this. I’m sorry your reply has taken the longest, that’s because I wanted to think about it, and wait for a quiet time to write it. It sounds like you are still in the middle of it, so I wanted to go back in my mind and think what I would have said to you back then, if you had come to the counter and said all that to me. Because another job I had while I was there was in the Disability Support Unit (DSU) which handled Sickness Allowance (SA) and Disability Support Pension (DSP), so it’s not an unrealistic scenario. So, I’d have said,

      1. Don’t Panic (always good advice). It’s only bureaucracy. We will sort it out. We’ll go through your claim step by step, and work out what we need to do.

      2. Make an appointment to see a social worker. Most offices have at least one on permanent staff. My medium-sized office had two. Try to be as honest about your problems as you can with them. They are paid to be sympathetic, and they carry a bit of weight around the office. They outrank the person processing your claim for instance. They also have information on, and contacts with, all the external agencies and resources in the local area so they can give you what in the Public Service we called a ‘warm handover.’ That means they call the person they’re referring you to and say, “I’m sending Lionel to see you. He needs…”

      3. Have you got a good doctor? If not, get one. The single most important opinion on whether you get SA or not is your doctor’s opinion. It’s probably a good idea to get them to refer you to a good psychologist or psychiatrist too. If you’re suffering from depression you’re going to need one anyway, and if it takes a while to deal with (and I don’t know, it might, it might not, everyone’s different) you might need to apply for DSP. In that case you’ll need reports from a psych and a GP.

      4. Once you get those things in place you’ll get paid, and it should be backdated to the day you first claimed, so if you can hold out with your housing situation you should get a decent first payment. If you’re in private rental be sure to bring receipts, rent book, whatever you use, so you can get rent assistance. It’s no fortune, but every little helps. If your situation is too urgent to wait, ask about Special Benefit. It’s a little-known and rarely-used payment, I must have seen 2 or 3 claims in my five years, but it’s basically the last strand of the safety net, for people who don’t fit into any other category, or don’t fit yet, but have no other means of support. The cases I saw were, I think, ones where we were waiting for information that would allow a claim for some other type of payment to be granted. It’s the ‘if all else fails’ catch-all payment.

      5. I really hope you work it out, if you have any questions I’ll try my best to answer, thanks for your comment, and good luck.


  5. Excellent blog. Thanks for sharing this.


  6. Marcus Seabrook permalink

    How do I subscribe to your blog? Oh and thank you by the way.


    • Thanks for reading Marcus. There should be a button to subscribe, somewhere near the top on the right. Just underneath the little ad for my facebook music page. 🙂


  7. jamie harris permalink

    Hi, i know in the 90’s the C/link staff were given training. My partner at the time was going for a jod there and had to do 3 months then another 3 at a centrelink in a different area. But after speaking to my local office the other day they have gotten rid of many of their trained staff and opted for new staff who recieve minimal training. I asked how they now do their job if they dont know what their position entails? The reply to that was the computer tells them now. They enter the info and the program they use makes the decision.


    • You raise a good point. When I started there, in 1991, the selection process was primarily via the Public Service Test. Nobody seems to remember it these days (though your partner would), but every year they would run a test for anyone who wanted to apply. It was basically an IQ test with a clerical twist. It took about three hours. Here in Melbourne they hired a big examination hall from Melbourne Uni (presumably also in the other capitals and regional centres), and ran test after test for about a week. In the one I took, roughly 17,500 people sat it in Victoria. DSS used to get first pick. Even so, they wanted to interview for social skills as well, so they interviewed the top 60, of which they took 20.

      Then we started out doing the mail, the filing, all the menial stuff, whilst doing loads of courses and watching experienced staff at work. It was months before we were allowed near a client (they officially changed the term from ‘client’ to ‘customer’ while I was there, a change we didn’t like as we felt it made us sound like sales assistants rather than the professionals we were), and at first it was only sitting in on other people’s interviews. It was indeed 5-6 months, on average, before we were considered fully trained, put on the front counter, and given ‘acting’ positions two pay grades up from entry level.

      These days, from what I’ve heard from former colleagues, they mainly hire from temp agencies. I honestly don’t know how they manage. Operating the system properly requires knowledge of scores of transaction codes (processing a fortnightly Newstart payment is a u60 for example), and we had to memorise them all. Yes, they might have a look up table to guide them, but that means looking it up every single time, which would destroy productivity. Anyway, that’s hardly a revolutionary concept. We had that too, only ours were called ‘manuals’ and sat on shelves. You know, occasionally you have to look something up. You wouldn’t want to be doing it every time though.

      Last time I had to make an enquiry at my local office, and I wonder how typical this is, I had to queue for 20 or 30 minutes, only to then be led to a phone line to the call centre. The office simply didn’t have the staff to deal with enquiries themselves, so that’s what they did. Perhaps that’s also where what’s left of the experienced staff are.


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