The ombudsman has started investigating the Centrelink data-matching debacle

A Medicare and Centrelink office sign is seen at Bondi Junction on March 21, 2016 in Sydney, Australia. (Source: Getty)

After an intense week of complaints from customers, politicians, Legal Aid, the social services lobby and privacy groups, the Commonwealth ombudsman will investigate Centrelink’s debt data-matching programme.

The office of ombudsman Colin Neave on Monday afternoon confirmed it is looking into the matter.

“Mr Neave has commenced an own-motion investigation into the matter and is considering the issues on a systemic level,” his office said. “The ombudsman conducts own-motions in private and accordingly, cannot comment on any specific details.”

Independent federal MP Andrew Wilkie said that the investigation was “a victory for common sense” as he credited the pressure that he and Senator Nick Xenophon had put on the ombudsman.

“The scale of this problem is beyond doubt, not least because Centrelink itself has admitted knowingly sending out as many as 4,000 incorrect debt notices a week,” he said.

Centrelink has reportedly sent more than 170,000 letters to customers accusing them of owing money or questioning their welfare eligibility after cross-matching their data from other agencies such as the Australian Tax Office. Many recipients of the notices have disputed the debts, with a social media campaign highlighting the swell of anger among those wrongly accused.

“My office continues to receive a large number of complaints from the community from people who are being wrongly accused of owing Centrelink money or at least finding it near on impossible to substantiate their income going back as far as 2010.”

With human services minister Alan Tudge last month threatening jail sentences for those who don’t pay the alleged debt, Wilkie last week claimed that he had been in touch with distressed customers considering suicide. The official Centrelink social media account was then observed referring upset customers to the crisis support service Lifeline.

As well as Wilkie and Xenophon, The Greens, Labor, Legal Aid Victoria, the Australian Privacy Foundation and the Australian Council for Social Services have all called for a halt to the data-matching. Department of human services has defended the system, citing that 80% of letter recipients have paid the debts.

Malcolm Turnbull’s former digital tsar Paul Shetler said last week that a 20% failure rate was “unfathomable” and that such a project would be stopped and judged a complete failure in the private sector.

“All I can say is, if they were a commercial company, you would go out of business with a 20% failure rate,” he told Guardian Australia.

“Come on. Could you imagine the stock exchange doing that? Could you imagine Amazon, Apple or a bank doing that? An insurance company doing that?”

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