Centrelink general manager Hank Jongen recently gave some advice on the Mind Your Own Retirement podcast about what to do if you receive a debt notice. Read the transcript below.
Kaye: Centrelink is a huge topic for our members because we know around 70 per cent of retirees are on a full or part pension. Would like to cut to the chase and talk to you about compliance, which at the moment seems to be centred on robo-debt.
Hank: Look, that’s very true. And look, I have to say, the recent coverage in the media has wrapped everything up into so-called robo-debt. Really welcome the opportunity of talking about this because the so-called robo-debt or the online compliance program is only one of a range of measures that we’ve got in place to protect taxpayers’ money.
And that’s really what we’re talking about here. What we’re talking about is compliance to ensure that people receive the right amount of money from Centrelink.
KF: So if we say to you why aged pensioners shouldn’t be concerned, how would you view that? What’s your take on that question?
Look, I totally agree. The reason I say that is what the online compliance program is about is identifying discrepancies between information that’s been provided to us and information that is then provided to the tax office through tax returns. And what the online compliance program does is when it identifies a discrepancy between what tax has been told and what we’ve been told, it generates a letter to the individual asking them to clarify that discrepancy. It’s really important to make the point this letter is not a dead letter. It’s simply a letter seeking clarification. It’s the start of the process. It’s not the end of the process.
KF: Well, I think that’s really important for people to understand that.
John: Absolutely, because there’s been a lot of sort of fear spread around. And as we know, some of our senior sites get very frightened very easily.
Absolutely. And look, that’s why it’s so important that I have the opportunity to explain this. Now in relation to pensioners, which you specifically asked me about, the first thing I have to say is we know from our statistics that only about 4 per cent of pensioners are actually employed. So, again, I just want to make the point that what we’re talking about here is earnings from employment. We’re not talking about reviews of shares. We’re not talking about an overview of investment. They are all part of separate processes that we have in place. The online compliance program is simply aimed at looking at earned income declared to the tax office. And if that differs from Centrelink, that’s when we will generate a letter.
KF: So, Hank, to cut to the chase for older Australians on Newstart, if this is about the full percentage of pensioners who are employed, does that mean people, older people on Newstart won’t be part of this program?
No, no. Older people on Newstart usually constitute a larger proportion of people who are actually working and earning income.
So they are part of the normal income compliance program. But look, it’s really important to make the point we only send these letters where discrepancies occur, where there’s a difference. And what it really highlights is the importance of keeping us informed. Updating is if you receive an increase in your income, updating is if you receive a bonus and look at the ways in which you can do that are many and varied. Look, when you sign up for a welfare payment, what you’re doing is you in effect entering into a contract with the Aust taxpayer, that you will be providing us with accurate information about your circumstances. And as I said, the online compliance program is just one of a number of measures that we have in place to make sure that the information that’s been provided to Centrelink is accurate.
KF: So just on the point of information and we often ask members or remind them that that keeping everything up to date is really important. But if somebody was to receive a letter asking about a discrepancy and it’s related to a debt that’s about seven years ago, I know in my life I’d have difficulty coming up with my information. How does that work?
Well, again, we have looked very carefully at ensuring that we try to make it as easy as possible for people to provide us with clarifying information. First thing I have to say is you don’t necessarily need to get seven years worth of payslips. What we’ve done is we’ve developed a formula where if, for example, you can provide us with bank statement and most banks will enable you to get statements online at no charge, then we can apply a formula to determine what your gross earnings will be. But look, this is this is the other big thing about these letters. The letter explains to you and gives you a number of options. First, you can seek to resolve the situation online through a link that’s included in the letter. But there’s also a phone number and there are experts at the end of that phone who can guide you through the process, who can give you advice because, you know, we really do need half an hour to talk to you.
I wonder if we could get a no name typical letter and put that on the Web site so people could see what the letter actually looks like and what the options are to respond. Is that a possibility?
Absolutely. Delighted to provide that information for you.
KF: Is the same kind of technology being used to look for people who might have been underpaid.
There’s no specific technology, but in instances, if we detect an underpayment, we would remedy that situation within a set of rules that relates to how far back we can go with underpayments. And look, I have to concede the focus here is on the protection of taxpayers’ money. There are other review processes that we have in place which can identify underpayments. And again, if we identify underpayment, then within a set of rules, we would make adjustments to people’s payments. But I’m not going to pretend that this is about finding underpayments. The primary purpose of this is to protect taxpayers’ money.
Look, if I say nothing else, what is of key importance is if you receive one of these letters, don’t ignore it. The worst thing you can do is ignore that letter. If you’re not sure about working your way through a computer and the link that’s provided, there are people at the end of the dedicated phone number that’s in that letter who can provide you advice and guidance on how to clarify the situation. Don’t ignore the letter.
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