One million automated debt notices, known as robodebt, have been sent out since the scheme began in 2016, the department responsible for administering the program has confirmed.
The one million letters have gone out to nearly 700,000 people.
The Department of Human Services, which has been rebranded as Services Australia, was grilled on robodebts by a Senate committee on Thursday.
Services Australia spokesman, Jason McNamara, told the committee the scheme has been successful in clawing back debts owed to the government.
The department went on to clarify later in the hearing that while $2 billion in debt has been raised, so far only $640 million has been fully recouped.
Mr McNamara said the department, which has oversight of Centrelink, has ramped up its debt notices since the scheme began more than three years ago.
“Our last 12 months, in terms of volume, has been the largest in the program,” he said.
20 per cent of debts are ‘wrong’
The department was adamant that its error rate was only one per cent – meaning errors like when staff input names and dates wrong.
However, the department does not consider the reduction or waiving of a debt as an error.
The committee heard from Services Australia spokeswoman, Annette Musolino, who implied one in five notices were waived or reduced.
“The person has gone through the process, they’ve engaged, they’ve provided information and there is a debt,” she said.
The Office of the Commonwealth Ombudsman said it received, on average, 100 robodebt complaints a month.
There was a steep increase in complaints in July and August of this year – 170 and 153 respectively.
Spokesperson Michael Manthrope said that was because of the number of people who have their tax returns garnished due to robodebts at the end of the financial year.
What is robodebt?
Robodebt refers to the computerised process of matching income support payments with tax office data to determine if someone has received more welfare payments than they are entitled to.
The scheme applies to people receiving Newstart, Youth Allowance, Austudy, parenting payments and the Disability Support Pension, but three out of four debts incurred were for people on Newstart or Youth Allowance.
The department confirmed it averages income over a 12 month period to ascertain welfare debts. This process has been criticised, because welfare payments require recipients to log their work hours and income on a fortnightly basis.
Debt averaging does not accurately reflect the incomes of people who work casual jobs or don’t work regularly over that 12 month period.
Mr McNamara said data-matching has existed within the department since the 1990s.
However, prior to 2016, when the current debt-averaging algorithm was introduced, the department only sent out 20,000 debt notices a year.
Debts can be incurred from welfare payments that were made seven years ago, and critics say it can be impossible to procure pay slips from that far back.
Ms Musolino said people can ask for the department’s help in contacting businesses or banks.
Services Australia has “coercive powers” to compel businesses and banking institutions to hand over financial data related to debt notices. So far the department has made contact with 1,000 employers.