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Community Affairs References Committee
Better Management of the Social Welfare System initiative

CHANT, Mr Scott, Service Leader, Sydney, Department of Human Services

MOWBRAY-D'ARBELA, Mr Marc, National Manager, Whole of Government Division, Department of Human Services

Committee met at 08:36

CHAIR ( Senator Siewert ): I declare open this public hearing and welcome everyone here today. We acknowledge the traditional owners of the land on which we meet and pay our respects to elders past, present and emerging. This is the fourth public hearing of the committee's inquiry into the design, scope, cost-benefit analysis, contracts awarded and implementation associated with the Better Management of the Social Welfare System initiative. I thank everyone who has made a submission to this inquiry. The committee also acknowledges all those people who have sent short emails to the committee, of which I understand we have had over 1,000.

This is a public hearing and a Hansard transcript of the proceedings is being made. The audio of this public hearing is also being broadcast via the internet. Before the committee starts taking evidence, I would like to remind everyone that today's hearing is a sitting of the federal parliament, and it is my responsibility as chair of this committee to ensure that witnesses have the opportunity to speak without interjections. I would be grateful for everyone's cooperation in this. If anybody here today does disrupt the proceedings, I may have to ask them to leave the room.

I also remind everyone here today that, in giving evidence to the committee, witnesses are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to the committee. Such action may be treated as a contempt by the Senate. It is also a contempt to give false or misleading evidence.

The committee prefers all evidence to be given in public, but under the Senate's resolutions witnesses have the right to request to be heard in private session. It is important that witnesses give the committee notice if they intend to ask to give evidence in private. If you are a witness today and intend to request to give evidence in private, please speak to the secretariat as soon as possible.

There will also be an opportunity this afternoon, after the tea break, for people who are not listed as witnesses on the program to give short statements to the committee. There is a strict three-minute limit on the statements. Participants will be invited in small groups to the witness table. Some people have already registered for these sessions, and I thank them very much. If anybody else here today wants to participate in these sessions, please speak to the secretariat, who will provide you with a Hansard form to complete and information about parliamentary privilege and the protection of witnesses and evidence. If you would prefer to speak to the committee in private session, we will also have the last session this afternoon, where people will be able to give evidence in private, or what we call 'in camera'.

I know that the media have already checked in with the secretariat. I need to check with the witnesses that they are okay for the media to be present. Also, I would like to request that you do not film people in the audience of our hearing today. Media are not invited to the afternoon session with private individuals. I also would ask people not to take photos of people in the audience without seeking the committee's permission to make sure that those witness who do not want to be identified are in fact protected.

Having said all of that, I would now like to welcome our first witnesses, who are from the Department of Human Services. I remind all witnesses that the Senate has resolved that an officer of a department of the Commonwealth or of a state should not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officers to superior officers or to a minister. This does not prohibit asking for explanations of policies or factual questions about when and how policies were adopted. Can I just double check that you have both been given information on parliamentary privilege and the protection of witnesses and evidence.

Mr Mowbray-d'Arbela : Yes.

Mr Chant : Yes.

CHAIR: We have your submission and a number of answers to questions on notice; thank you very much. I have some questions about those questions and answers, but we will get to that shortly. Would you like to make an opening statement?

Mr Mowbray-d'Arbela : There is one point I would like to refer to. The Department of Human Services is aware that the committee is taking evidence today and next week from its external collection agent contractors, Probe Group and Dun & Bradstreet. These firms undertake work under contract on behalf of the department. Under those contracts these firms are required to comply with all relevant consumer law obligations. The performance of these firms is viewed by the department through quarterly formal process reviews. These firms deal directly with individual cases as have been referred to them by the department. If the committee wish to ask about individual cases, questions in relation to specific individuals would be best directed to the department.

CHAIR: Thank you.

Senator WATT: Thank you both for coming along today. I just have some general questions to start with. Are you aware of any efforts made by the department—I probably mean more centrally, in Canberra—to target the efforts around the robo-debt system at particular geographic regions within Australia? Are you aware of anything in New South Wales, for instance, to suggest that particular regions were targeted in the initial rollout of that program?

Mr Mowbray-d'Arbela : I might start with that because you mentioned the central perspective. No, I am not aware of targeting of anything on a regional basis. I could take that on notice just in case there is something.

Senator WATT: I would be keen to know. I suppose I am trying to start chronologically, before the system rolled out. When were you notified or when was the state service area first notified of the department's intention to roll out this program?

Mr Chant : We would have first become aware with the budget papers, obviously, that the program was to start.

Senator WATT: Is that the last budget?

Mr Mowbray-d'Arbela : I think it was the 2015-16 budget, so in May 2015.

Mr Chant : More direct instructions about the process that was going to follow started in probably June or July on the ground.

Senator WATT: June or July of 2015?

Mr Chant : 2016.

Senator WATT: Does that mean it was the 2016-17 budget where you first became aware?

Mr Mowbray-d'Arbela : Maybe I could clarify. The strengthening welfare announcement that occurred in May 2015 related to two phases of the activity. In the budget year of 2015-16 the manual processes were occurring and 2016-17 is when the online compliance aspect occurred.

Senator WATT: So it was June-July 2016 that you were first made aware that this, if you like, was coming your way?

Mr Chant : That is when we first started to see detail about how the process would happen and the role of service officers and service centres, which was the bit I was involved with.

Senator WATT: I am interested in that. What were you told was to be the role of service centres? Just so we understand, when you talk about service centres, are you talking about the physical shopfront of a Centrelink in the region that it services.

Mr Chant : Yes.

Senator WATT: What were you told was the role of services centres in this?

Mr Chant : The role was consistent with our general role, which is to assist access. With specific online compliance initiative inquiries, it was to assist people to get online in the first instance or refer them to the compliance number.

Senator WATT: Compliance phone number?

Mr Chant : Correct.

Senator WATT: What you were told by central office was that the role of service centres—how many are there in New South Wales?

Mr Chant : I would have to take that on notice. I am responsible for 26, and there are three other zones that make up New South Wales.

Senator WATT: So there are 26 within your zone?

Mr Chant : Yes.

Senator WATT: And there are four zones in total in New South Wales?

Mr Chant : With similar numbers, but not exactly the same, so I would have to take the exact number on notice.

Senator WATT: Does your zone encompass Sydney and surrounds?

Mr Chant : My zone is entirely metropolitan. We do pretty much out to Parramatta and as far north as the Northern Beaches down to Camden, Picton et cetera.

Senator WATT: So the role of the service centres within your zone was to essentially assist—is clients the terminology?

Mr Chant : Recipients.

Senator WATT: To assist recipients who had questions or disagreed with Centrelink's assessment of them?

Mr Chant : Generally the inquiries for us would be the initial letter, and people, as they often do, would come in and say, 'What's my next step?' and so we would advise the next step, which is to get online in the first instance, and we might need to help facilitate that if they did not have a myGov account, or to ring the compliance line.

CHAIR: When you say 'assist', we have had evidence, and there is more in our pack today, of people that found the online process really difficult, that they did not give extra information where they apparently could have. If people had questions, could they ask you at the time—not you personally; Centrelink staff—for assistance about the form itself?

Mr Chant : Our role is generally around the access, and then once it becomes part of the process, that 1800 number for the compliance officers. They are trained more around the screen flows and how that works than the service officers in the service centre.

Senator WATT: What direction were you given by central office about whether your employees could assist people? You have said that the direction was basically, 'Try to get them online; if that's not an option, there's a phone number to call.' Obviously a lot of people are used to being able to have that sort of face-to-face assistance from Centrelink to resolve any issues. What direction were you given by central office about whether you could or could not enable people to have that kind of face-to-face assistance?

Mr Chant : The instruction, as I said, was about how we facilitate access to the trained officers. Because service officers and service centres are not specialists in debt raising or debt recovery, they generally are not able to go into the depth of those calculations with customers anyway, whether it is an online compliance debt or any other debt. So the process for us is pretty generic across that debt spectrum. We refer them to a debt management unit if there is already a debt. In this case, where it was around the matching rather than a debt, it was referred to the specialised officers. That advice is consistent with a range of functions across the department, particularly around debt, where our guys are no longer trained in that specific function and so they cannot really help the customer with the level of accuracy that the compliance officers can.

Senator WATT: So it was very clear to you that the department's distinct preference was for people to resolve any issues they had through the online process?

Mr Chant : Particularly that first contact, yes.

Senator WATT: And that was in order for them to provide any further information that was required to judge whether the letter they had received was right or not? Is that the kind of thing that—

Mr Chant : I have not been trained in the process either, but my understanding about the first letter is that it is just saying there is a match, and the process is that we would facilitate them getting online so they could confirm whether that match was correct or not.

Senator WATT: Do you have any figures about the number of OCI notices that have been sent out in New South Wales?

Mr Mowbray-d'Arbela : I do not know if we have got that to hand.

Mr Chant : Could we take that on notice?

Senator WATT: Yes, could you take that on notice please. Similarly, could you take on notice how many debts have been raised in New South Wales and the value of those debts. When I am talking about debts raised, what I am interested in is the total figure that people were initially asked to repay and also the figure which, it has essentially been accepted, the person does genuinely owe. In some of the earlier hearings we have been given a large figure for the amount of money that the department has asked to be repaid, but it has turned out that a smaller proportion of that was actually owed once further information came to light, so I am interested in both those figures for New South Wales.

Mr Mowbray-d'Arbela : Alright.

Senator WATT: When you were notified by the department centrally that this system was going to be rolled out in June or July last year—and I am aware that Centrelink is a pretty stretched agency—were you advised of any additional resourcing that would be provided, whether it be staff or other kinds of resourcing, to handle these inquiries?

Mr Chant : You are talking about in service centres?

Senator WATT: Yes.

Mr Chant : I would have to take that on notice to look at our allocation, but my understanding is no, because they were general inquiries and the detailed conversation was to be held elsewhere. Our role, as I said, is just to facilitate the person through to the right officer rather than deal with the work.

Senator WATT: So, to the best of your recollection, there was no additional resourcing provided, at least to your zone, which covered Sydney, in anticipation of the inquiries that might come from this new system?

Mr Chant : As I said, I will take it on notice. There may have been some incidental contact forecast, but not that I am aware of.

Senator WATT: Was any training provided to staff to prepare them for the inquiries that were going to result?

Mr Chant : As I mentioned, our role was quite clear. The information through to the officers consisted of what we call network updates, where they were given information about the type of contact. There were task cards and even some screenshots of the initial screens, and those sorts of things, so that people could facilitate that contact.

Senator WATT: So it was very focused on ensuring that your employees had the skills to push people online?

Mr Chant : We want to get the recipients through to the people who have had the training and the skills in that process.

Senator WATT: They were back of house, were they, the people with the skills and training? They were sitting at the other end of the online portal?

Mr Chant : I am not aware of the arrangements about where they were sitting or how they were located—whether it was a virtual team or anything like that.

Senator WATT: Do you know anything about that, Mr Mowbray-d'Arbela?

Mr Mowbray-d'Arbela : Yes. I could maybe go back to one of the issues that you raised about matters within New South Wales. If I could direct you to question on notice No. 26—

CHAIR: I am at that one; I was going there myself. It is just for the notices. What Senator Watt has just asked is more much broad than that and, in fact, I was going to expand that. I think Senator Watt was specifically asking around the Sydney region though—weren't you? Or did you want the whole of New South Wales?

Senator WATT: I am interested in New South Wales. I understand Mr Chant just deals with the Sydney region, but I am interested in New South Wales as a whole.

Mr Mowbray-D'Arbela : Just so you are aware, the department has responded to question on notice number 26, and the number for New South Wales initiated up to 28 February 2017 is 67,896.

CHAIR: Senator Watt was asking for more information than that. They were the 221,000-odd notices. We were specifically then going to—as you keep reminding us, they are not debt notices—the initial contact letters. What Senator Watt was asking for was the actual debts. So how many have then had debts raised? And beyond that, how many went to nothing? How many were then reduced? And I would like to expand it to all of the states. That would be appreciated.

Mr Mowbray-D'Arbela : Certainly.

Senator WATT: That would definitely be useful. Moving to when the system commenced, and I have roughly worked off the November-December period that it really got up and running and people started receiving these newsletters—

Mr Mowbray-D'Arbela : Senator, do you mind if I just check on that one? I think the initial contact letters were occurring earlier in this current financial year.

Senator WATT: Yes, but there was marked upturn, wasn't there?

Mr Mowbray-D'Arbela : Where the engagement had not necessarily occurred and then there would be follow-up letters, then yes, that may have been moving into the November-December period.

Senator WATT: What I am thinking about is the period when there was lots of activity, lots more letters going out, lots more complaints and lots more media attention. Did you, Mr Chant, within your zone, find that the resourcing that you had to deal with complaints or queries was sufficient?

Mr Chant : Yes. My sense is that our foot traffic in December, January and even February was less than the corresponding period a year before across Sydney. I could not tell you about individual sites but, year-on-year, it had reduced.

CHAIR: What figures do you have to support that?

Mr Chant : I will have to take it on notice; I do not have them with me. We have a system where our service officers, the customer liaison officer in the front of the office, will record whether someone is there for an appointment, a general inquiry, or they are referred off to self-service. We refer to those as contacts, so we keep them in general categories. We do not record whether they are related to OCI or not, but we know roughly how many people came in. It is obviously affected by system performance and a range of other things but, year-on-year, it has reduced.

Senator WATT: Once this system was up and running in a big way, did you need to reallocate or redeploy staff from particular jobs to deal with the influx?

Senator WATT: No, not in the service centres.

Senator WATT: It is curious that you say this—and the things that Senator Siewert picked up on—because, elsewhere, we certainly formed an impression that there was a marked upturn in numbers of queries, complaints and requests for assistance. But are you saying that you did not experience that in your zone?

Mr Chant : At the top level, as I said, there was a reduction year-on-year. I have not done analysis about whether it was Medicare inquiries that reduced, Centrelink inquires that reduced or other inquiries that reduced. I just know, at the top level across Sydney, it has reduced.

Senator WATT: Do you have the capacity, for instance, if Medicare inquiries all of a sudden start going through the roof, to move staff who are dealing with Newstart to deal with Medicare or—

Mr Chant : The staffing resources are flexible in as much as we can train people and give them the skills. In this particular example, the training and the skills were concentrated with the compliance officers so that general access business could be picked up by any of our service officers.

Senator WATT: But, again, your experience was you did not need to do that, at least within the zone?

Mr Chant : No.

Senator WATT: Do we have any information about the other zones in New South Wales—whether there was any need to move people to deal with these kind of inquiries?

Mr Chant : I would have to take that on notice, but I have not heard from my colleagues that that happened.

Senator RHIANNON: I am starting to gain more understanding of how it is playing out. Considering that there has been controversy, staff have obviously been under pressure. I want to gain an understanding of how you handle that. Maybe just start with how you have handled the pressure the staff have been under as the issue has become more controversial and the people who you are trying to collect the debt from—some people get agitated. We have heard the problems that people have run into in trying to sort out what their personal situation is. I was interested in understanding to what degree you have engaged with the union, the CPSU, about this and how you have gone about that.

Mr Chant : I will have to take that on notice. I believe there was a national—

Mr Mowbray-d'Arbela : We are aware that the CPSU has raised concerns about OCI staff being directed to ignore errors in relation to its compliance activities, but the department has advised the CPSU that it is unaware of these circumstances. In fact, the department staff are trained to deal with a wide range of matters and are encouraged to seek direction from managers as and when required.

Senator RHIANNON: I missed the first bit. Were you saying, essentially, that your staff have not been under pressure?

Mr Mowbray-d'Arbela : There was a suggestion, we understood, from the union that staff had been directed to potentially ignore errors or that there had been some departmental direction that had added to the stress. We are not aware of that particular issue.

Senator RHIANNON: When you say that you are not aware of it, you mean that you were not—

Mr Mowbray-d'Arbela : We do not believe it—that is correct.

Senator RHIANNON: You regard that as not correct or you never received reports about it? What do you mean that you were not aware?

Mr Mowbray-d'Arbela : The department has been of the view that, when we monitor service delivery across our face-to-face telephony processing and customer aggression environment, there has not been any significant increase of concern across the department.

Senator RHIANNON: It could be interpreted that there is already a high level of concern or it could be interpreted the other way. Could you expand on that, please?

Mr Mowbray-d'Arbela : I am not sure—I did not fully catch—

Senator RHIANNON: You said that there has not been an increase. Now, that could mean that there is already considerable agitation amongst staff in terms of the way that they have to conduct their work. You are not giving us a baseline of what the previous situation was.

Mr Chant : In the service-centre environment, this initiative had, I would almost say, a negligible impact.

Senator RHIANNON: A negligible impact on staff?

Mr Chant : Service-centre staff have referred debt inquiries, data-matching inquiries and those sorts of things to trained officers for a number of years. The significant change for service officers in this process compared to previous processes is the online aspect and that extra step of facilitating online access to that system. We have already invested a lot in staff around helping them to assist customers, whether it is with myGov, Centrelink online or other online processes, anyway. The material difference was not great.

Senator RHIANNON: I now go to the online access, and you can paint a picture for us. Considering that you are referring everybody to fill out the forms online—and we know that some people do not like using computers, do not have experience using them, and are already feeling agitated that they may have to pay this money that they were not aware that they had to pay—it is hard to imagine that people at that point, when your staff refer them to, 'Go over there and use our computer,' are not feeling agitation that your staff then have to deal with.

Mr Mowbray-d'Arbela : A comment on that: where there is particular agitation, we have highly trained staff who make sure that we then refer individuals to social workers in the department. For example, staff transfer calls to social workers where necessary as part of the standard process. There has been no increase in social work referrals due to the online compliance measure. In the last six months or so, there has been a gradual reduction in unscheduled absences in the compliance division, and at the same time as—

Senator RHIANNON: Do you mean of your workers there?

Mr Mowbray-d'Arbela : Indeed, and of our compliance officers who are specifically dealing with the online compliance matters that you are mentioning. At the same time, there has been no increase in incidents or injuries reported by staff relating to mental stress. I guess the proposition that we were hearing was that there is a significant increase in stress, and I do not think that is necessarily borne out by the facts.

CHAIR: We had evidence last week that in fact people were not going to particular offices because of distress, and I think you were in the room when we received that evidence. So what you are saying is actually inconsistent with other things we have been told by people who actually use the offices.

Mr Mowbray-d'Arbela : We are certainly looking to assist people as much as we can, and thus, as the Ombudsman's report pointed out, having clear information in the online environment but also getting individuals to talk to an expert officer on our 1800 086 400 number quicker is one of the best ways that we can give assistance to people that is specific to their issues.

CHAIR: I understand what you have just said, but what you said earlier about no increase in aggression is actually inconsistent with the evidence that we have received from people who are actually going into the physical offices. We have been told that they are avoiding going into the offices because of the increased distress and anguish that is happening in the offices. There has been aggression in the offices. I am sure you were in the room when we received that evidence in Melbourne last week.

Mr Mowbray-d'Arbela : Yes, and as the department has provided back to the committee, we closely monitor all instances of stress and potential aggression. That is promptly reported and addressed on a daily basis in the department. But, perhaps contrary to perceptions, there has not been a significantly marked increase—and to the extent that there was perhaps more attention to these matters over January and February—the experience of the department has been that matters have actually settled to some extent.

Senator RHIANNON: So is it a fair summary that you are saying that there is no change in your staff's work situation with regard to difficulties faced with customers, but with regard to customers there is an increase in agitation and difficulties in working on this debt issue?

Mr Mowbray-d'Arbela : I am not sure that I am in a position to be able to comment on the general experience of recipients—

Senator RHIANNON: But, in terms of the reports that are coming to you, there must be reports about how it has been received when people come in to the offices. I am just trying to get that summary so we have got a picture of how you are seeing things.

Mr Mowbray-d'Arbela : It may be better if I take this on notice so I can give you a comprehensive reply to these issues, but I wanted to give an initial comment: we do not have evidence of there being some marked significant increase in customer aggression or staff stress.

Senator WATT: Or customer complaints, leaving aside aggression?

Mr Mowbray-d'Arbela : I do not think necessarily on complaints either. I may have some information on complaints. I will take that on notice too, but I might be able to get back to you sooner.

Senator WATT: If you have got that here, we would be interested.

Senator RHIANNON: That would be really useful. What opportunities are there for individual compliance officers to raise concerns with management around the debt recovery program?

Mr Mowbray-d'Arbela : I think that would be part of our standard processes where all staff are invited to make comments on matters, including process improvement at any stage.

Senator RHIANNON: Considering this was such a new program and it has become so controversial so quickly, you did not put any special measures in place?

Mr Mowbray-d'Arbela : It depends on what you mean by 'special measures', but there are two things I could point to. One is this inquiry itself, which the department is taking very seriously. There is also the inquiry by the Commonwealth Ombudsman, which led to an ongoing environment of looking for continuous improvement, and the department has embraced feedback on how to make the system simpler and better and has implemented a lot of the recommendations already and is continuing to do so. We work in an environment where, I think, if any employee sees something that could be done better, they are encouraged to say that. That is certainly the lived experience: we are always looking to improve our interactions with customers and make them the most effective and efficient process, and where we can find simpler, better ways to work we continue looking for that, including in the online environment or the telephony solutions.

Senator RHIANNON: Thank you. I just want to pick up on a question that Senator Watt asked. You took it on notice. I think it was about the Centrelink automatic debt recovery and the figures for calls coming in for New South Wales. Was that the one you took on notice?

Mr Mowbray-d'Arbela : Yes.

Senator RHIANNON: Could you also do that for areas within New South Wales like the Illawarra and Newcastle. You probably break it down by regional areas. Other areas are the Mid North Coast, the Central West and those sorts of things.

Mr Mowbray-d'Arbela : I am not aware of the extent to which it can be broken down, but we will take that on notice.

Senator RHIANNON: However you can break it down. Can you provide that, please.

CHAIR: My understanding, from having been in a call centre, is that you can actually see on the board which lines are coming into and the region.

Mr Mowbray-d'Arbela : Yes.

CHAIR: So I would have thought that you could provide that, but we would obviously take it on your regions rather than the specific regions we just asked about.

Mr Mowbray-d'Arbela : Yes.

Senator RHIANNON: Yes, what your regions are.

CHAIR: Break it down on how your regions are.

Mr Mowbray-d'Arbela : The service zones have a particular perspective.

CHAIR: If it is possible, could you do that for all of the regions around Australia, because we will just ask the same question for WA.

Mr Mowbray-d'Arbela : Indeed.

CHAIR: So, if you could provide that for all, that would be appreciated. I want to go back to the point that we were talking about earlier, on the people coming into the actual offices to ask for particular information. We asked about this the other day—I cannot remember, quite frankly, if it was Adelaide or Melbourne. We have had a response back already—thank you—that you do not have any data available on recipients attending services to inquire about the online compliance intervention. Quite frankly, I am not surprised, because I am not going to walk into your office and say, 'I want to complain about this OCI.' What I am going to come in to you about is the letter I have had about the debt. With all due respect, when you say 'about OCI', I presume you mean about that particularly, rather than the debt letters they have received. We had a conversation, if you recall, about iPad use and things like that. I understand what you have said about the reduction in people coming in; it does not mean that they are not coming in about different issues. So things could go up in a particular area. So can you go back and look at that to see if they have come in about the initial debt letters or once they have received a letter about their debt notice.

Mr Mowbray-d'Arbela : We certainly will do that. Just on the process aspect, we had a range of questions on notice in the appearances that the department has had with the committee to date. I do not think we have a transcript from Wednesday last week.

CHAIR: This would be one that was asked earlier; it has just crossed over.

Mr Mowbray-d'Arbela : I think there is an aspect of this that is already being looked at, and we are doing our level best to get back to the committee as quickly as we can. As soon as we have the transcript for today, I will check the extent to which this question is consistent with what we are already putting together.

CHAIR: Yes, okay. This one specifically talks about OCI, so could we have it more generally, because that is what people are going to ask about. Thank you. I want to go back to some of the questions on notice you have already answered but also just to refine a couple of the things from last week. Last week, on Wednesday, we were talking about when somebody can ask for a review, and we got a bit tangled up later in the afternoon. I want to go back, because of the language that has been used. People can ask for a reassessment. Then we have the formal review process with an ARO. Then we have the appeals process.

Mr Mowbray-d'Arbela : Correct.

CHAIR: That is the correct understanding.

Mr Mowbray-d'Arbela : When I took an aspect of that on notice last week—without wanting to be overly pedantic, I think, there is a question about when during a telephone call does it become a review? In relation to our submission, I think, we explained that there is that reassessment process, which is typically what would occur on the telephone.


Mr Mowbray-d'Arbela : Then if the matter were to be referred to an Authorised Review Officer, or ARO, then that is a separate interaction that occurs.

CHAIR: From talking to individuals, it became clearer that this is a misunderstanding about the reassessment, the formal review and the appeal process. From our discussion last week, I understand—and I wanted to clarify—that people can ask for a reassessment—

Mr Mowbray-d'Arbela : Correct.

CHAIR: How many times can they ask for a reassessment before it then gets kicked to a review?

Mr Mowbray-d'Arbela : I am not sure there is an absolute answer to the question of how many times. But maybe contextually I could assist in a sense that so long as there is further information that the recipient can offer to the compliance officer then we welcome that, and we will reassess the information. The reassessment process continues until the point that the recipient says, 'I have no further information to explain why the tax information and the social welfare information dates cross.' At the point that the recipient is no longer providing information for reassessment, and there is potentially a debt due or payable, if the debt is then found—if they are still concerned and they are not comfortable with that—then the compliance officer would typically ask them if they would like it to be referred to the independent Authorised Review Officer.

CHAIR: At what point does that happen? Once they get their notice of a debt owed is when they go for a review?

Mr Mowbray-d'Arbela : Typically, once there has been a decision, and the information provided suggests there is a debt owing, then they could ask for that to be reviewed. To be clear, our compliance officer will provide that information to recipients, so it is not like the person has to think to ask. If the person is concerned and if they are in contact with our compliance officer, then the compliance officer will typically ask if they want it to be sent to a review process.

CHAIR: In the questions on notice we have received, the process goes through when a debt is then referred to a debt collector if the person is no longer a recipient—

Mr Mowbray-d'Arbela : I think the phrase we tended to use in our submission is 'former recipient'. They are not currently receiving welfare payments, so we would—

CHAIR: Yes. When a person gets referred to a debt collector—which reminds me of another question I have, which relates to the review—if they are under review the process is suspended.

Mr Mowbray-d'Arbela : The payments can be paused, and, I think, that is typically the case—

CHAIR: You said they 'can be'. From the questions on notice I was under the impression, and I think the committee was under the impression, that it does and that—

Mr Mowbray-d'Arbela : That is correct. There is a nuance to that that a person may enter into a payment plan and may wish to continue paying. That could possibly arise if the debate is more about the quantum of the debt rather than whether there is a debt at all, so a person may ask to continue paying to some extent. I just thought I should mention that, yes, when it is under review there is a pause of the payment requirements.

CHAIR: Is that if it is under formal review?

Mr Mowbray-d'Arbela : Yes.

CHAIR: Is the current cohort of a bit over 6½ thousand, that was referred virtually straight away, under review?

Mr Mowbray-d'Arbela : That question is also a matter that has been taken on notice. That answer is being developed. If you do not mind, I could take that aspect on notice.

CHAIR: Where I am coming from is about the reassessment and review. Have any debts that are now referred to a debt collector been through the reassessment process and been through the review?

Mr Mowbray-d'Arbela : The conversation got a bit complicated last week because there is a bit of a parallel in conflating those two questions of reassessment and the debt collector. If I could just assist, the external collection agency was, to some extent, engaged in cases where we actually had difficulty contacting the person or they had not entered into a payment plan. It is not always the case that there has been enough engagement with a person to actually go through a reassessment process before it is with the debt collection agency.

CHAIR: Let's carve off the 6,600 which you have taken on notice from when the decision was made that that process would be halted and nothing would be referred until after the review. I am trying to understand where the line is now because, to me, it still seems pretty grey around at what time it gets referred or handed on to an external collection agency.

Mr Mowbray-d'Arbela : Maybe I can get back to you on that particular issue on Friday.

CHAIR: I thought I had it clear in my head, but, from reading the answers to questions on notice and the discussions we have already had, it is not clear—I am sorry. If you could get back to me, that would be appreciated. From the questions on notice and the conversation we have just had, the various time lines involved for barring a debt's referral to the external collection agency are pretty clear. The submissions we have received seem to indicate that there is a different process involved there about when payments are starting to be garnished. Could I ask you to take on notice the time line for when the garnishing starts and whether that has changed, as well as the process of referral of the time line and the process. I ask that because it indicates to me that people are starting to be garnished before they have completed the whole process.

Mr Mowbray-d'Arbela : I will take that on notice. If I could make one comment, the technical phrasing we have used is about payments being withheld rather than—

CHAIR: Other people use the word 'garnish'.

Mr Mowbray-d'Arbela : 'Garnishing' is a word that actually applies in a formal context regarding employment payments. Because this is in relation to withholding aspects of welfare payments, we tend to try and avoid using—

CHAIR: Okay, I will use the right word—withholding.

Mr Mowbray-d'Arbela : I understand the point you are making. It is a question that has been taken on board. The answer is being developed, so I should be able to speak to that very soon.

CHAIR: Thank you, that would be appreciated. This may have been put on notice by the committee last week, so if it has, just say it has been taken on notice. We have had quite a lot of issues raised around single parents. I think you took on notice a question asking you to detail the numbers. Do you know if that is able to be done?

Mr Mowbray-d'Arbela : I actually do not have an update on that.

CHAIR: If you could get that it would be appreciated. The other issue was the non-lodgement of tax returns by the other parent. There are questions on notice you have returned and we have talked about where the issue of violence is involved. Thank you for that. What I am more generally interested in is where there have been debt issues raised where the other parent has not lodged a tax return. Does that make sense?

Mr Mowbray-d'Arbela : It does, yes.

CHAIR: Thank you for some of the answers to the questions on notice, but it actually does not resolve some of the issues around where you write off a debt. In the questions on notice you talk about under $50. Some of the verbal evidence we have received has said that it is higher than that.

Mr Mowbray-d'Arbela : I will just see if I can find that particular answer. I think the issue is that there is discretion in relation to matters that go up to $200. I think the answer we provided explained that if there is a current recipient the actual waiver only occurs below $50. So there are two numbers. It is a matter of law and also the social security policy.

CHAIR: Which bit is law? I am trying to find the answer.

Mr Mowbray-d'Arbela : The law is for $200 and the policy is for $50.

CHAIR: Here it is.

Mr Mowbray-d'Arbela : May I ask what number it is?

CHAIR: It is 57. So the law says $200. Can I ask how many have been waived for less than $200?

Mr Mowbray-d'Arbela : Yes, I will take that on notice.

CHAIR: How many have been waived for less than $50?

Mr Mowbray-d'Arbela : Yes, on notice.

CHAIR: The other thing is: if I am a current recipient of Newstart, you are basically reclaiming less than $50 because you can. Is that right? I may be working and get a debt of under $50 and be let off, but if I am a recipient I would not be.

Mr Mowbray-d'Arbela : I may just go through the answers. The current threshold to recover debts raised under the Social Security Act 1991 is $50. The limits are determined by policy legislation administered by the Department of Social Services. The Social Security Act 1991 permits waiving of debts less than $200 where recovery is not cost effective. However, a waiver cannot apply if the debt is at least $50 and could be recovered by deductions from a person's social security payment made under the Social Security Act 1991. The Guide to Social Security Law, as released on 20 March 2017 states:

The policy is that only debts less than $50 must be waived as it is considered cost effective to recover all debts over this amount.

CHAIR: They must be waived?

Mr Mowbray-d'Arbela : In the example you just gave, if a person owes less than $50 that would be waived, but if it is between $50 and $200 it would not be waived if they are a current recipient.

CHAIR: So if it is between $50 and $200, if you are a recipient you have to pay, but if you are not a recipient you may be let off.

Mr Mowbray-d'Arbela : It is a question of the cost effectiveness.

CHAIR: Could you take on notice how many have been waived at less than $50, how many have been waived between $50 and $200—those are non-recipients—and how many recipients have been charged between $50 and $200? Does that make sense?

Mr Mowbray-d'Arbela : Yes.

CHAIR: So you cannot waive anything greater than $200?

Mr Mowbray-d'Arbela : I need to take that on notice. I think that there are some other laws that may be relevant.

CHAIR: If you can, because we had a conversation—I am sure it was with Ms Campbell, but I will need to check the Hansard—where there was suggestion that debts higher than $200 could be waived.

Mr Mowbray-d'Arbela : There are some issues regarding the concept of write-off and waiver. The Public Governance, Performance and Accountability Act may also be relevant. I will take that on notice.

CHAIR: Could you take us through each of those steps and, if any greater than $200 have been waived, can you let us know that too, please? Senator Watt, I have basically taken us to the end of time, but do you have a couple more questions?

Senator WATT: Yes, I do. I am interested in talking with you about a couple of the media reports about this whole debacle and what information was provided to state officers about managing it. In January, I think, there was an article in The Guardian which talked about Centrelink staff being directed to not fix mistakes in debt notices. Are you aware of any direction given to New South Wales staff along those lines?

Mr Mowbray-d'Arbela : No.

Mr Chant : Certainly not in service centres, no.

Senator WATT: But I suppose it would have been more compliance staff that would have been dealing with these kinds of matters. Is that right?

Mr Chant : It is hard to imagine any direction to that effect. I can only comment on what went to my people, but no.

Mr Mowbray-d'Arbela : I think the department has already indicated that we do not believe any such direction occurred.

Senator WATT: There have obviously been a range of questions concerning the provision of personal information of Centrelink recipients to media organisations. Mr Chant, are you aware of any requests being made to state based offices, whether they be in service centres or regional offices—wherever they might sit—about seeking information on Centrelink recipients who have gone to the media?

Mr Chant : I do not recall any escalations or inquiries coming through my office, no.

Senator WATT: It has been a little bit difficult to trace how this information has emanated. We established in one of the earlier hearings that, on at least one occasion, it was the minister or the minister's office who provided information about a particular recipient to the media. It gets a little bit difficult to work out exactly where that information was sourced from, because it would not have just been sitting in the minister's office. You are not aware of any requests made to service centres in New South Wales for that kind of information?

Mr Chant : No, I am not. Our media protocols for service centre managers are that they would refer any media contact through to the media unit in Canberra, so they would not respond locally.

Senator WATT: I am not so much talking about media contacting you seeking information about Centrelink recipients; I am more talking about internal requests you might receive from higher up in the department seeking information about particular recipients.

Mr Chant : I do not recall any in relation to OCI, no.

Senator WATT: Are you able to shed any light on how that information is sourced when it is provided to the media, Mr Mowbray-d'Arbela?

Mr Mowbray-d'Arbela : So that I can understand the question better, you are asking: how would information be provided to—

Senator WATT: How is information obtained? If a particular recipient has been in the media complaining about their experience, and a decision is made for the minister or the department to respond and put personal information about that recipient into the media to counter whatever has been said, where does that information get sourced from?

Mr Mowbray-d'Arbela : The primary reaction from the department to matters that are raised in the public domain is a service recovery reaction. We look at whether there is an issue that needs to be addressed. That is a continual process. Beyond that, any specific issues would be looked at in their particular instance, so I do not have a general answer on that in a particular context.

Senator WATT: Mr Chant, are you aware of any guidance being given to state based officers of Centrelink about how to handle reports, in the media, about client experiences with this system?

Mr Chant : We were not given advice about how to respond, because the nature of the process and the procedure is that it is compliance. Generally, any responses required would have been emanating from that particular part of the organisation.

Senator WATT: Are the compliance people based in state offices or are they centrally located?

Mr Chant : I could only talk anecdotally. I think they are distributed—organisationally, you mean?

Senator WATT: Yes. Are there some in New South Wales, for instance?

Mr Chant : I am not sure whether there are any in New South Wales working on this particular initiative. I could not answer that.

Senator WATT: I think we have made a standing request to have state based officials come to some of these hearings as we travel around the country. It might be useful if we could get someone who is familiar with the compliance side in the state, at the front end, because a lot of these questions are not within Mr Chant's responsibilities.

Mr Mowbray-d'Arbela : All right, Senator, yes. I think we interpreted the request to be a service delivery—

Senator WATT: I understand. We too are learning as we go about how it all works. So zone managers—like yourself, Mr Chant—were not instructed to contact anyone who appeared in the media to seek further information or to clarify anything.

Mr Chant : No. As my colleague mentioned, service-recovery issues are handled in a more centralised way as well. Teams monitor and respond and we pull that all together.

Senator WATT: There has been a media report, in the last week or so, about Centrelink's increased use of debt collectors to pursue these debts. I do not know whether this was canvassed in some of the hearings last week that I was not at. There was an article in The Guardian last Wednesday, 12 April, which said that Centrelink has used private debt collectors to pursue 43 per cent of the debts raised by their robo-debt system and that this is a vastly higher rate than normal. Is that report correct?

Mr Mowbray-d'Arbela : I think that was a report that related to information that had been tabled with the committee in response to a question on notice, so, if you don't mind, I might take your specific question on notice. In terms of a general comment, I think the question that has arisen—regarding matters for former recipients—is that the nature of the online compliance initiative related to older discrepancies and differences in information from 2010-11 and 2011-12 and that there would be a higher proportion of people who were no longer current recipients. We have been at pains to explain that the external collection agencies are only engaged where the person is not a current recipient. And if the person—

Senator WATT: Why has there been such a significant jump in the proportion of debts that have been referred to debt-collection agencies?

Mr Mowbray-d'Arbela : I am not sure that is the right way to characterise it. I believe that the amount of money that has been received through debt-collection processes has been around the 12 or 13 per cent mark. But, I think, in relation to this program, where the former recipient has not been able to be located or if they have been not engaging with the department to enter a payment plan, that is where the external collection agency gets engaged.

Senator WATT: I understand that there are only a certain proportion of matters that are referred to debt-collection agencies and there is a process that is gone through before it gets to that point. But, according to this report, in 2015-16 about 12½ per cent of these types of debts were referred to private debt collectors and that has now jumped to 43 per cent of the debts. It might be that there are more debts being raised—or it might be that there are fewer—but my question is: why is there an increased reliance on private debt collectors to pursue those debts?

Mr Mowbray-d'Arbela : I will take it on notice. But I think the issues that arose were, significantly, for people who were former recipients and that there were more former recipients involved in the OCI process than in other matters. That is why that number might seem skewed.

Senator WATT: There have been a number of freedom of information requests made to the department concerning this whole matter and, I understand, there has been very little response—or very few documents provided in response—to those requests. I do not know if you have this information to hand. Perhaps you could take it on notice. I am interested in knowing how many FOI requests the department has received about the OCI process, the breakdown of requests for personal information as opposed to requests from the media and how many have been finalised. I understand the freedom of information disclosure log has not been updated so I would also like an explanation about why that is the case.

Mr Mowbray-d'Arbela : Yes, I will take that on notice.

CHAIR: I would like to add to that one. You have responded to one of the questions on notice by saying you can only respond to questions from the department over FOI. The last sentence says: 'The department maintains an appropriate level of resources to meet its obligation under the FOI Act.' Can you tell us what that appropriate level is, given the increase that we have been told about the number of FOI requests? So, along with answers to the other questions, could you add: what is the level of resources that you are now committing compared to what it was this time last year?

Mr Mowbray-d'Arbela : Certainly.

CHAIR: Thank you very much for your evidence today. There is an ongoing process of questions on notice, which I am sure you are liaising about with the secretariat.