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Centrelink rejects widespread problems with families overestimating their incomes.



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PM

 

Monday 1 November 2004

Centrelink rejects widespread problems with families overestimating their incomes

 

MARK COLVIN: The Commonwealth Ombudsman has revealed that families trying to avoid being saddled with family payment debts have been missing out on federal and state government discounts or concessions. 

 

The Ombudsman says the welfare delivery agency, Centrelink, has been suggesting to families that they overestimate their income to reduce the likelihood of accumulating a family tax benefit debt. 

 

As a result, however, some people did not qualify for low-income health cards. 

 

And as a result of that, those families missed out on a range of health care, electricity and car registration concessions. 

 

Alexandra Kirk reports from Canberra. 

 

ALEXANDRA KIRK: The Federal Government's been plagued by the overpayments problem ever since it revamped the family tax benefit system, requiring families to estimate their earnings in advance. 

 

Many families aren't able to make a perfect guess. 

 

Over the past three years, 1.4 million families have incurred a family payment debt. 

 

In a bid to reduce the number of debts, the Government's suggested families over-estimate their income. 

 

But the Commonwealth Ombudsman John McMillan has found there's a downside for families trying to avoid a debt by taking Centrelink's advice - some missing out on qualifying for low-income health care cards, and as a result missing out on a raft of commonwealth and state government discounts or concessions on car registrations, electricity bills, health and pharmaceutical costs and even exemptions from stamp duty. 

 

Opposition leader Mark Latham says the family debt crisis is getting worse. 

 

MARK LATHAM: It's a shocking situation for the hundreds of thousands of families that have got these family payment debts, to now learn that Centrelink tells them to overestimate their income, and that costs them concessions and benefits they would have received and were entitled to from other levels of government. That's a terrible outcome. 

 

ALEXANDRA KIRK: The Ombudsman's also revealed his office argued successfully for compensation to be paid to one customer who, because they complied with Centrelink's instruction to overestimate the family income for the purposes of the family tax benefit, missed out on the state government concession for new homebuyers with the low income health card.  

 

One of Centrelink's national managers, Hank Jongen, insists it's an extremely unusual and rare case. 

 

HANK JONGEN: We made the compensation payment on the basis that this particular case was exceptional and unusual. We knew of no other instance where something like this had occurred and because of the unusual nature of the case, we made the decision to pay compensation. 

 

ALEXANDRA KIRK: What about the other cases where the Commonwealth Ombudsman has found that some people didn't qualify for low-income health cards, and therefore the concessions that went with them? 

 

HANK JONGEN: All of the investigations that we've made as a result of the Ombudsman's report and some of the referrals to us, indicate that these are exceptionally unusual cases. There are no widespread incidents of these sorts of problems. 

 

ALEXANDRA KIRK: So is Centrelink still advising people to overestimate their income in order to make sure that they aren't overpaid their family tax benefit and therefore incur a debt? 

 

HANK JONGEN: No. When customers contact us now, and particularly since November 2002 when the "More Choice for Families" was announced by the Government, we encourage customers to estimate their incomes as accurately as possible. Now in the case of people who have variable income, there's a couple of things we do. Firstly, we encourage them to maintain close contact with us, so that they're accurately updating their income on a regular basis. 

 

ALEXANDRA KIRK: And if needs be, fortnightly? 

 

HANK JONGEN: If needs be, fortnightly, because that's the way to avoid incurring a debt.  

 

The other key thing that we talk to customers about - we encourage customers to take their base rate and then the balance at the end of the year when there's a reconciliation as a lump sum payment. 

 

ALEXANDRA KIRK: Can you guarantee that no families will be missing out on their low-income health care cards and all the concessions that go with them as a result of any advice that Centrelink is giving them about overestimating their income? 

 

HANK JONGEN: Look, what I can tell you is that the case that was cited by the Ombudsman is an exceptional and unusual one. 

 

ALEXANDRA KIRK: When you say there's no widespread evidence of such problems; what about smaller numbers of cases? 

 

HANK JONGEN: Well look, what I'm saying to you is that it is exceptional and unusual. But again, I can assure you, we're talking about a small handful. 

 

ALEXANDRA KIRK: And would you consider compensating them is they missed out valuable concessions? 

 

HANK JONGEN: Well again, I go back to the point - in this case, we made a compensation payment purely on the basis that it was exceptional and extremely unusual and rare. 

 

MARK COLVIN: One of Centrelink's national managers Hank Jongen, with Alexandra Kirk.