Services Australia proposed not to contact past customers affected by 15,803 potentially “inaccurate child support assessments” but backtracked after the commonwealth ombudsman warned this could leave parents out of pocket.
In a statement on Monday the ombudsman revealed that poor IT systems had resulted in errors in up to 47,488 assessments, but Services Australia had wanted to avoid notifying about a third of the caseload, a plan the ombudsman labelled “unfair”.
After obtaining external legal advice at the ombudsman’s recommendation, Services Australia reversed its earlier decision.
“We sincerely apologise to impacted customers,” said Hank Jongen, Services Australia’s general manager.
He said the agency was contacting “12,000 former customers whose child support payment rate may have been incorrectly calculated due to now resolved system errors”.
Services Australia’s processes have been in the spotlight due to its administration of the unlawful robodebt scheme and a separate ombudsman report finding “unlawfully apportioning” welfare recipients’ income had resulted in incorrect debts.
In the Making Things Right report the commonwealth ombudsman, Iain Anderson, said a single complaint in 2018 had revealed “that a problem with the child support IT systems had resulted in inaccurate child support assessments”.
In 2019 Services Australia suggested it would reassess and remediate all affected cases identified. It then rectified the IT system in June 2020.
But in July 2021 the agency decided only to remediate 31,685 cases “which were either active or finalised with arrears” and “not revisit any of the cases which were finalised without arrears”, 15,803 cases in which parents had paid their former partners what Services Australia had told them they owed.
“We were concerned that customers in the remaining cases group would be unaware that they may have been affected, potentially significantly, and may have rights to seek review,” the report said.
The ombudsman said there “had been no assessment of the monetary quantum of the errors involved” and there was “a lack of contemporaneous records setting out the reasons for Services Australia’s decision not to correct the errors”.
“We also noted that the systems error had the practical effect of causing financial disadvantage to one party due to no fault of either party and that Services Australia should consider options to remedy the errors without negatively impacting the parties.”
Services Australia advised that instead of notifying those affected, it planned to review an assessment only if a customer complained.
“This approach created an unfairness between those customers who contacted Services Australia and those who didn’t,” the ombudsman said.
The ombudsman suggested in November 2022 that Services Australia obtain external legal advice on the decision not to correct the error and notify all affected customers.
After it did so “Services Australia decided that it would take action on the remaining cases”, to contact affected customers “to discuss whether they would like their assessment to be updated”.
“As a result of our suggestions, Services Australia changed its planned approach to remediation and developed a more customer-centric service recovery plan.”
Jongen said the ombudsman had “identified system errors that applied incorrectly deemed or default incomes to child support assessments for approximately 33,000 customers between 2011 and 2018”.
“We corrected payment records for 21,000 current customers last year. We’re now contacting former customers to give them the opportunity to have their assessments corrected.”
Jongen said the initial decision “considered the overall value and risk” to former customers such as “parents who are no longer in contact with each other” and “the complexity of this correction”.
In August Guardian Australia revealed prosecutors have paused 32 criminal cases and are investigating possible wrongful convictions due to Services Australia relying on an incorrect understanding of welfare law.
The robodebt royal commission found that the Department of Human Services, which later became Services Australia, “established, implemented and maintained an unlawful program” of income averaging that affected nearly half a million welfare recipients.
