We have also sent inquiries and requests for information to Services Australia under Section 8 of the Ombudsman Act.4. In 2015, Services Australia conducted a two-stage pilot to inform the design of the IC program.
I SSUES ARISING OUT OF INVESTIGATION
Identifying relevant debts
Services Australia has advised that it has a number of processes in place to check and ensure the accuracy of its staff's initial categorization decision. We understand Services Australia has some mechanisms in place to address the residual risk that not all revenue compliance debts have been correctly identified for a refund.
Recording and reporting on reasons for decisions
This would allow Australian Services to better understand the proportion of debt incurred under the IC program that was wholly or partly reliant on income averaging. For each debt they considered, Services Australia should record the basis on which they categorized the debt as collected using income averaging or not.
Pausing debts at risk of being ‘legally insufficient’
During this investigation, our Office raised concerns with Services Australia about its decision to proceed with recovery action on revenue compliance debt while it undertook its identification process, rather than freezing all revenue compliance debt prior to undertaking the process. During this investigation, our office raised concerns with Services Australia about its continued collection action on 'agreed' debts. Services Australia has informed our office that the Australian Government has decided that, as at 29 May 2020, 'agreed' debts are eligible to receive repayments.
In light of the risks involved in accepting the 'agreement' of a person of average income amounts, Services Australia should have stopped collecting 'agreed on' debts immediately. Following the refund decision of 29 May 2020, our office has proposed to Services Australia to prioritize refunds for individuals seeking prepayments.
Communication with impacted individuals The period 19 November 2019 to 29 May 2020
Messages on the Services Australia website - Services Australia has since posted several announcements and updates on its website about the refund process. Letters and online notices - Services Australia has sent written correspondence directly to individuals who have been identified as eligible for a refund. Social Media – Services Australia have posted a series of updates on the refund process on their social media pages (Twitter and Facebook).18.
We acknowledge that Services Australia has not yet decided whether it will revisit and . potentially reinstate debt that has been refunded. However, we do not believe that Services Australia has been sufficiently transparent with individuals about the possibility that this may occur.
Refunding eligible debts The refund process
For those individuals who have received income average debt repayments, any future decision by the Australian Service to revisit and re-raise debts for the same period of debt can cause hardship. In these circumstances, we believe that Australia Services should provide information to . individuals to help them understand the nature and impact of the Australian Government's refund decision of 29 May 2020. Alternatively, if Services Australia does not intend to revisit and potentially re-raise the debts that were the subject of refunds, it must publicly confirm this at the first opportunities.
Services Australia has communicated that as of 1 July 2015 approximately 5,200 income compliance debts have been appealed to the AAT. Nevertheless, we believe that Services Australia should look for a solution to enable refunds to people in these circumstances.
Internal reviews
Services Australia also uses a process where a Subject Matter Expert (SME) carries out a quality check and/or reassessment. Services Australia advised the Bureau that 'if at any time a person advises that they wish to proceed directly with a formal or ARO review of the decision, this will be referred to an ARO.' We welcome this advice. Services Australia informed individuals that it required additional income information before an assessment could proceed.
Further, in circumstances where Services Australia is unable to obtain income information from the individual or from third parties for the purposes of an SME quality check, we consider that it should finalize the quality check based on evidence of different from the average ATO information available. In circumstances where Services Australia is unable to obtain income information from the individual or third parties for the purposes of an SME review, it must finalize the review based on evidence other than the average ATO information available and t give a decision to the individual.
Ongoing actions under the Income Compliance Program Using bank statements as evidence of a person’s income
OMBUDSMAN 0
Supplementary submission by the Commonwealth Ombudsman
Inquiry into Centrelink’s compliance program
15 September 2020
Introduction
It further advised that it would contact individuals who used Services Australia. However, the Office has and will continue to actively monitor relevant complaints, and engage regularly with Services Australia to seek assurance that the process of identifying and remediating debts incurred using average income information from the ATO fair and transparent. Following the government's announcement39 on 29 May 2020 that it will repay debt and/or reduce to zero 470,000 debts that are wholly or partly based on income.
We welcome the opportunity to provide a supplementary submission to the Senate Community Affairs Reference Committee with the aim of outlining some ongoing issues that have been brought to our attention by affected individuals and other matters that we continue to address. investigation. This submission is about Services Australia's progress in implementing changes to the program since November 2019 and the impact these changes have had on individuals.
Complaints to the Office
Communication
An individual advised that during a recent contact they made with Services Australia to request a review of their income compliance debt, they discovered that a freeze had been placed on the debt. The individual expressed concern that they would not have known about the freeze, including why the debt was frozen or what it meant for them, if they had not taken proactive steps to contact Services Australia.
Accuracy and Reviews
An individual informed the Office that they contacted Services Australia to request a review of their income compliance debt on three separate occasions over a period of seven months. Services Australia confirmed it had failed to initiate a review in response to any of the individual's contacts. Services Australia has since advised that it has recorded an 'advance' review of the individual's debt.
However, Services Australia later applied an interest charge to the debt on the basis that it had not been paid 'in full'. Services Australia has since advised that the decision to charge the debt and the interest charge has been set aside following review.
Financial impact
Investigation of Services Australia’s actions
In February 2020, the Ombudsman launched an own-initiative inquiry, under section 5(1)(b) of the Ombudsman Act 1976, into Services Australia's actions to identify and redress debts affected by the averaging of ATO income information . How Services Australia implements changes to the program and the impact these changes have on individuals is the primary focus of our research. In the six months between Services Australia's announcement on 19 November 2019 and the Government's announcement on 29 May 2020 that 470,000 debts would be repaid, Services Australia has provided no substantive communication regarding its actions.
Notwithstanding these factors, we believe that Services Australia should have communicated more. Services Australia has made some adjustments to the correspondence in response to our observations, which we hope will improve the experience of the intended recipients somewhat.
Ongoing repayments of debts
On each occasion, the Office provided feedback regarding the clarity, transparency and accessibility of these letters. We also raised concerns about this approach because of the potential problems associated with assuming individual "consent" to average income amounts. For example, an individual may have agreed that the payment information provided by the ATO would be accurate without understanding (and therefore not agreeing) that the payment information would be averaged over a series of payment periods.
Similarly, 'agreement' may have been influenced by the likelihood of penalties potentially being imposed if individuals do not fully comply. While this may have now happened for some, it is unclear whether those people still awaiting refunds have had their debts frozen in the meantime.
Advance payments
Ongoing investigation
Services Australia has informed the Office that it has taken steps to refund relevant debts in accordance with the Government's announcement of 29 May 2020 as soon as possible. While we welcome these actions, the Office continues to monitor and investigate Services Australia's implementation of the Government's May 2020 announcement to refund and/or reduce debt to zero and the impact on individuals in our. The procedures that Services Australia implemented to ensure that it can identify all debts incurred in reliance on average ATO income information that the Government has undertaken to remove and/or refund.
How Services Australia will minimize inconvenience, disruption and disadvantage to individuals during the refund process. How Services Australia will communicate with those individuals whose debts are not eligible for repayment and/or write-off.
A PPENDIX B: G LOSSARY
Reviews conducted by Services Australia under the IC Program to examine a discrepancy in individuals' income information and determine whether there was an overpayment resulting in a debt owed to Services Australia. Test point Information that Services Australia relies on to determine an individual's income for the purposes of determining whether a debt should be raised. Australian Subject Services Officer who has specialist knowledge of payments or special Expert (SME) programs.
A report published by the Commonwealth Ombudsman on the IC program in April 2017: Centrelink's automated debt collection and recovery report. Commonwealth report published by the Commonwealth Ombudsman April 2019 2019 Commonwealth Ombudsman 2019 2019 on the IC programme: Centrelink's automated debt collection and recovery system report: implementation report.
A PPENDIX C: S ERVICES A USTRALIA ’ S RESPONSE
Thank you for your letter of 11 February 2021 offering an opportunity to respond to your report, The Australian Service Income Adjustment Program - Report on the Implementation of Program Changes by the Australian Service in 2019 and 2020 (Report). The response of Australian services (agencies) to the report and recommendations is set out in the context of the Prime Minister's statement on 29 May 2019 that it is the first. OMBUDSMAN ANNUAL REPORT 2021: AUSTRALIAN SERVICES COMPLIANCE PROGRAM - A REPORT ON THE IMPLEMENTATION OF CHANGES TO THE SERVICES AUSTRALIA 2019 TO 2020.
Australian Services is working with the Department of Social Services and its legal advisers in relation to this matter. At a minimum, the correspondence should note that Services Australia made changes to the IC Program in November 2019 and will no longer raise debts relying solely on
