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Contents Chapter
7 Looking
at the agenciesCentrelink |
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CHAPTER
7
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| centrelink |
Centrelink menu: Welfare to Work | Ongoing issues | Emerging issues
Centrelink continues to be the agency about which the Ombudsman receives the highest number of approaches and complaints. This is not unexpected given the high volume of transactions and the complexity of the services and payments it provides on behalf of a number of Australian Government agencies.
As discussed in Chapter 5—Challenges in complaint handling, where a number of agencies have involvement in administering legislation, setting policy, and service delivery, it can be problematic to establish the basis of problems and their resolution—a complaint about service delivery might equally be about the policies and legislation. For this reason, a number of issues discussed in this section about Centrelink also relate to other agencies, such as the Department of Employment and Workplace Relations.
In 2006–07 we received 6,987 approaches and complaints about Centrelink, compared to 7,333 in 2005–06. This represents a decrease of 5%. There has been a steady decrease in complaints about Centrelink over the past five years, as shown at Figure 7.3.
During 2006–07 we investigated 17% of the 6,877 approaches and complaints finalised, with the most common issues being claims for payment, cancellation or suspension of payments, and changes to payment rates.
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On 1 July 2006 Centrelink commenced the Government’s Welfare to Work reforms, which made significant changes to the way income support payments are administered. The reforms include stricter participation requirements and compliance measures for people in receipt of activity-tested payments such as Newstart Allowance (NSA), and new assessment processes for disability support pension (DSP) claims.
We identified some key areas of concern in complaints we have received about the implementation of the Welfare to Work initiatives. The following issues are discussed in further detail below:
Centrelink customers who receive activity tested payments—that is, who need to complete certain activities and report these to Centrelink in order to receive their payment—have always faced penalties for failure to comply. Before Welfare to Work, these penalties took the form of ‘breaches’, where a person’s payment rate could be reduced or payments could be suspended entirely or for a period of time, depending on the level of non-compliance.
Under Welfare to Work, the system of ‘breaches’ was replaced by ‘participation failures’. A ‘participation failure’ is imposed when a person does not meet one of the conditions of payment under their participation or activity test requirements, such as missing a scheduled appointment with a Provider of Australian Government Employment Services (PAGES), without a reasonable excuse. If a person has three such participation failures in a 12-month period, an eight-week non-payment period will apply, during which time the person does not get any income support payment.
There are also ‘serious participation failures’ where one event triggers an eight-week non-payment period. Serious failures include refusing a suitable job offer, voluntarily leaving employment, being dismissed from employment due to misconduct or failing to attend full-time Work for the Dole.
Centrelink’s National Participation Solutions Team is responsible for investigating the incident(s) that led to the third or serious failure, and deciding whether a non-payment period should apply. As part of the decision-making process, Centrelink staff consider whether the person facing a non-payment period meets the ‘exceptionally vulnerable’ test for financial case management (for example, has a medical condition requiring treatment or prescription drugs) or has vulnerable dependants (for example, children). If Centrelink decides that a person meets the vulnerability criteria, they may be considered for financial case management. In this case, the person’s essential expenses are paid over the course of the non-payment period by a third party community organisation or Centrelink’s financial case management team. A customer may appeal the participation failure(s) or serious failure decision(s) that have resulted in an eight-week non-payment period through the normal Centrelink appeals process, and can request continued payment pending the outcome of the review.
Not surprisingly, these forms of intervention have led to complaints to this office. In considering these complaints, we have identified broader issues about administration of Welfare to Work, and about differing interpretations of policies and procedures, that we will explore more fully as systemic investigations in 2007–08. Some of these broader issues are discussed below.
‘... we have identified broader issues about administration of Welfare to Work, and about differing interpretations of policies and procedures ...’
We received some complaints where Centrelink had withheld payments for eight weeks when there was only a ‘possible failure’—that is, before Centrelink had made a decision that three participation failures or one serious failure had occurred without reasonable excuse. Centrelink has advised that it will attempt to make contact by phone or letter prior to payments being withheld. In the cases investigated, the people found out that their payments had been withheld when they attempted to lodge their fortnightly forms and were told that Centrelink could not accept them as they were on a payment withholding period. When they asked why Centrelink had not notified them or how they could appeal the decision, Centrelink’s response was that a formal notification could not be issued, as a formal decision had not yet been made.
This process is a serious concern and the subject of a systemic investigation on which we will report in 2007–08.
In some cases described above as cases of ‘possible failure’, there has been a delay of up to eight weeks to make a decision that a person has actually incurred the third or serious failure. This can leave the person in dire circumstances. During the withholding period the person has no review or appeal rights, is unable to seek payment pending review, and is not able to access financial case management even if they might otherwise have been eligible.
Although there are clear timeliness standards for Centrelink decision-making, complaints to this office highlight instances where there appear to have been lengthy delays in decision making. Again, this is an issue we will consider more fully in our program of systemic investigations in 2007–08.
Our investigations have highlighted cases where Centrelink has withheld payments before a decision was made, and later decided that the person had a reasonable excuse for the ‘serious failure’ or ‘participation failure’ and thus should not have had their payment withheld. However, because of the delay in making the decision about whether a non-payment period should be imposed, the person concerned has been forced to survive without a basic social security payment and no means of earlier resolution, because all appeal avenues were unavailable until a ‘reviewable’ decision was made. While arrears are paid for the period that the person was not receiving a social security payment, this comes after the person has had to overcome issues such as eviction notices and loss of utilities such as electricity and telephone.
The case study Action without a decision illustrates the types of issues that can arise in relation to suspending payment without making a decision, timeliness of decision making, and denial of appeal and review rights. These are areas that we will continue to monitor closely over the next year.
action without a decision |
CASE STUDY |
Centrelink withheld Mr A’s income support payment following three participation failures, but before making a formal decision about whether or not the failures should apply. During this period Mr A did not have access to review rights and was not considered for financial case management for seven weeks. When Centrelink finally examined Mr A’s circumstances, it determined that he had been eligible for financial case management for the entire non-payment period due to his medical condition which required treatment with prescription medication. However, as no formal decision had been reached, the referral for financial case management had not occurred. |
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A person can have a non-entitlement period imposed during which their payment remains unpaid until they have completed an agreed activity or requirement. For example, a non-entitlement period may be applied where a person has not contacted the required number of employers to canvass employment as agreed. Non-entitlement periods continue until the person complies with the requirements.
Continued non-compliance attracts participation failures with people potentially accumulating three participation failures during a non-entitlement period and therefore attracting the eight-week non-payment period penalty in addition. An eight-week non-payment period is generally meant to begin in the payment period immediately after the regular fortnightly payment has been made, but in some cases the non-payment period is added on to the non-entitlement period—sometimes without the person being notified as there has been no formal decision. This results in people being penalised for a total of ten to twelve weeks without any income support.
We have sought all the relevant policy and legislative documentation on the issues above from both Centrelink and DEWR. Should this information support our initial views that there are inconsistencies in policy and program delivery, the Ombudsman will report on this systemic investigation in 2007–08.
One of the new initiatives requires that a person who applies for a Centrelink payment due to an illness or disability that prevents or reduces their capacity to engage in paid work must undertake a job capacity assessment. This assessment examines the person’s medical condition to determine what, if any, capacity they have to undertake paid employment. If the person is assessed as having the capacity to work 15 or more hours per week, they must engage in some form of work which may be voluntary, paid, or a combination of both, as part of the condition for payment. People with partial capacity will, as a rule, be granted NSA rather than a DSP.
In order to qualify for the DSP, amongst other things a person must meet three criteria—their medical condition must be treated, be stabilised and be expected to persist for longer than 24 months. The job capacity assessment is used to determine if they meet these criteria and what, if any, work capacity they have.
Approaches to this office during the year indicated that, in referring people for job capacity assessments for DSP claims, Centrelink can overlook the difficulties people with serious illness can have in undertaking these formal testing processes. The case studies Incapacity for job capacity assessment and ‘Failure’ to attend interview demonstrate the types of problems that have arisen.
We are considering whether these cases and others point to potential systemic issues which we should investigate.
incapacity for job capacity assessment |
CASE STUDY |
Ms B was undergoing chemotherapy for leukaemia when she applied for a DSP. Centrelink correctly rejected Ms B’s claim as she did not meet the legislative requirements, and placed her on an interim NSA payment. She was advised that in order to assess her ongoing qualification for NSA, she had to undergo a two-hour job capacity assessment. Despite explaining that it would be difficult for her to attend an interview as she was still receiving chemotherapy and had recently undergone surgery, Centrelink booked a job capacity assessment appointment for Ms B. When Ms B did not attend, as she was in hospital at the time, Centrelink cancelled her interim payment. Ms B made several unsuccessful attempts to be placed on some form of income assistance, as she was no longer able to support herself and was unable to meet the job capacity assessment requirement at the time. As a result of our investigation, Centrelink acknowledged that it could have undertaken a file assessment of Ms B’s medical condition. Centrelink subsequently made such an assessment, and placed Ms B on NSA with a medical exemption from job search activities. Ms B had endured several months of trauma and financial uncertainty before her case was resolved. Centrelink has advised that the Job Capacity Assessment referral guidelines now state clearly that if a customer is in hospital a file assessment should be requested. |
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‘failure’ to attend interview |
CASE STUDY |
Mr C, who suffered from severe epilepsy, was required to attend his local Centrelink office for a review of his DSP. While waiting in line, Mr C had an epileptic seizure and paramedics were called. While the paramedics were attending to Mr C, Centrelink staff called his name, as he was next in the queue. The paramedics advised the Centrelink officer that the man on the stretcher was the person concerned and that they were in the process of stabilising him before taking him to hospital. Mr C was hospitalised for several days. On his return home he found that Centrelink had sent him a letter advising that his DSP had been suspended because he had failed to attend an interview at his local office. After several unsuccessful attempts to have Centrelink overturn the decision, Mr C approached us. As a result, Centrelink reinstated Mr C’s DSP and back-paid him to the date of the cancellation. Centrelink also discussed alternative DSP review options with Mr C. |
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For several years we have received approaches and complaints about Centrelink’s internal review processes. We have highlighted these issues with Centrelink and in our annual reports. While we note the continued improvement in complaint trends regarding Centrelink, we remain of the view that revision of internal review processes could assist in the timely and effective resolution of complaints.
The social security law sets out that a person who is unhappy with a Centrelink decision is entitled to have a review by an Authorised Review Officer (ARO). Although not provided for in the legislation, Centrelink’s default review procedure includes a review by the original decision maker before the matter is referred to an ARO. This continued practice of referring review requests for consideration by the original decision maker before directing them to an ARO puts people through an extra step. This can create protracted delays, as the case study To review or not to review demonstrates.
to review or not to review |
CASE STUDY |
Ms D sought review of a decision to raise an overpayment debt against her. She made numerous requests to have the matter reviewed by an ARO as she believed that the original decision maker was biased against her. After 17 months of inaction by Centrelink, Ms D approached this office. When we asked Centrelink about the delay, we were given an undertaking that the review would be given priority and would be referred to an ARO. However we later became aware that, despite the delays already encountered, the matter was first referred to the original decision maker before it was eventually escalated to an ARO. |
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In a 2004–05 audit of Centrelink’s review and appeals system, the ANAO raised similar issues as those highlighted by this office. The ANAO conducted a follow-up audit and published its final report in May 2007. The report includes a recommendation that Centrelink ensures its customers are made aware they have a legal right to have a decision reviewed by an ARO without a review by the original decision maker first. Centrelink agreed to this recommendation.
We believe that having reviews conducted by an ARO in the first instance will significantly improve the consistency and timeliness of decisions and we will continue to monitor the situation.
Last year we reported that Centrelink would implement new national guidelines on ‘banning’ difficult customers from Centrelink offices. Centrelink confirmed that the guidelines addressing ‘alternative servicing arrangements’ were released to its network in February 2007, with the expectation that all areas and their respective call centres and customer service centres would be trained in their intent, content and application.
In May 2007 we received a complaint from a customer who had recently been ‘banned’ from attending all Centrelink offices for a period of three months. Our investigation identified that staff from two separate Centrelink offices, both of which had attended the training on the new guidelines, chose to deliberately ignore the instruction given by Centrelink’s National Office.
The relevant officers acknowledged that they were aware of the instruction to implement the new guidelines for dealing with difficult customers, but had opted to ignore them as they were ‘guidelines’. They decided that it was preferable to apply a policy document from another department, which was not authorised for use by Centrelink staff. The policy they chose to use had no alternative servicing arrangement requirements, which left the customer with no way to contact Centrelink.
Centrelink was responsive in dealing with this matter. Centrelink provided alternative servicing arrangements to the customer and indicated that it would contact him to review his circumstances and those that led to the original ban.
In the Welfare to Work environment, payment is dependent on fortnightly reporting to Centrelink. A failure to report may result in non-entitlement and non-payment periods. This office acknowledges that it is often challenging to deal with people who exhibit difficult and aggressive behaviour. However, it is imperative that alternative servicing arrangements are offered in these circumstances. This ensures that people are not denied payments because they have no way of contacting Centrelink.
Since the release of its guidelines, Centrelink has been working with the Ombudsman’s office to identify and remedy any instances of non-compliance.
Further work is being undertaken in Centrelink to clarify and emphasise with employees those aspects of the guidelines that are mandatory and those that will remain subject to the discretion of senior managers. This work, expected to be completed in the latter part of 2007, will emphasise that the discretionary areas of the guidelines are determined by the individual customer’s circumstances rather than arbitrary Centrelink decision. Centrelink is also integrating occupational health and safety staff support principles and activities into the guidelines, to provide staff with a comprehensive view of the most appropriate interventions in working with customers.
We continue to receive complaints about Centrelink’s decision letters, templates and standard letters. A common complaint is that decision letters do not offer adequate, or even any, reasons as to why or how a particular decision was reached. Without a clear explanation, a Centrelink customer may lack the necessary information or understanding to make an informed choice about whether to seek a review of the decision.
‘We continue to receive complaints about Centrelink’s decision letters, templates and standard letters.’
In one case a customer wrote to Centrelink requesting a review of a decision to raise a carer payment debt. Centrelink sent the person a manually written letter affirming the decision. However, the letter contained a number of grammatical errors that affected the clarity of its advice and did not include the table that it referred to. If provided, the table would have shown all the payments that were made to the person’s partner that had affected the rate of carer payment. There were also extensive extracts from the relevant legislation with no explanation as to how this applied to the person’s circumstances. In response to our investigation, Centrelink agreed to review the matter again, and to provide the customer with a better explanation of reasons and an apology.
In July 2006 the Hon. Joe Hockey, then Minister for Human Services, tasked Senator Richard Colbeck with leading a review of Department of Human Services forms and letters, including those of Centrelink. We welcome this much-needed focus on the quality of Centrelink’s letters and hope that this will result in a decrease in complaints relating to unclear, ambiguous or misleading correspondence.
In September 2005 the Ombudsman commenced an own motion investigation into the policy guidelines used by Centrelink in assessing ‘marriage-like relationships’ under the social security law. We aim to publish the final report of this investigation early in 2007–08.
We also began an own motion investigation into the administration of the Pension Bonus Scheme in March 2006. In our 2005–06 annual report we anticipated this investigation would be finalised in late-2006. Due to the prioritisation of other work, it has not yet been completed. In light of the measures announced in the 2007–08 Federal Budget, which make the scheme more flexible, we are currently considering whether it remains necessary for us to continue with this report.
The complex policy, service and contractual arrangements under the Welfare to Work initiatives, involving multiple agencies, present particular challenges to our office in dealing with complaints related to these initiatives. For example, when we decide not to investigate a complaint, it is generally on the basis that the person has not raised their complaint with the relevant agency in the first instance. However, the situation is no longer so straightforward, as it can be difficult for us to identify the most appropriate agency to which we should refer the complainant. It also complicates our complaint handling. Chapter 5—Challenges in complaint handling provides more details about the issues which arise.
‘... it can be difficult for us to identify the most appropriate agency to which we should refer the complainant.’
An example of the cross-agency issues that can arise is described in the case study Inflexible procedures. In this case, a simple administrative error had the potential to delay the assessment of a person’s claim for a disability support pension for a further 28 days due to rigidities in the bureaucratic system. Our investigation staff had to negotiate with three separate government agencies to resolve the matter.
inflexible procedures |
CASE STUDY |
Mr E lodged a claim with Centrelink for the DSP. Mr E was granted NSA pending the outcome of his DSP claim, and was referred for a job capacity assessment. Due to an administrative error, the job capacity assessor was not asked to provide an impairment rating to inform the DSP decision. This meant that Centrelink was unable to use the assessment in determining Mr E’s DSP claim. Centrelink acknowledged that Mr E should have been referred for an assessment of his impairment level as well as his work capacity. Centrelink stated that the job capacity assessment system, which is administered by the DHS but uses the DEWR information technology system, did not allow Centrelink to refer Mr E for another assessment within 28 days of the original assessment. When we contacted the DHS, we were advised that the restrictions around the timing of job capacity assessments were built into DEWR’s record-keeping system on which job capacity assessments are scheduled. The DHS acknowledged that the rigidity of the system had the potential to disadvantage people in situations such as Mr E’s. The DHS advised that it has negotiated with DEWR and the mandatory delay has been removed. |
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Dealing with people with mental health issues has become a focus for a number of departments and agencies that deal with the public, including both Centrelink and the Ombudsman’s office. A number of complaints received over the past year highlighted the need for agencies to adapt service models to handle this client group effectively: treating them in the same manner as other customers often sees them fall between the cracks.
For example, in 2006–07 we handled an approach from a man with an anxiety disorder. His relationship with Centrelink had broken down to the point where he had become so distrustful of their actions that he would make multiple complaints to this office in anticipation that Centrelink was going to make a mistake with his payment. He expected our office to take on the role of a de facto advocate and to make all contacts with Centrelink on his behalf. Our investigation indicated that although there might have been an initial problem with Centrelink, the major issues could be attributed to the fact that he refused to remain in contact with Centrelink.
Another emerging issue is how Centrelink deals with people with undiagnosed mental illness or episodic illnesses. The new Welfare to Work requirements make it a challenge for Centrelink to appropriately service this vulnerable customer group, particularly where the person has no insight into their condition, even when staff recognise that mental illness may be a factor.
These issues are brought into sharp focus in cases where a person with an undiagnosed mental health condition applies for an income support payment and has to undergo a job capacity assessment to determine work capacity. Often the person has no medical evidence supporting their claim or, in a number of cases, the person refuses to accept that they might have a mental illness. The result is that the person is granted an activity-tested payment such as NSA instead of the more appropriate DSP, and then has difficulty in complying with the required activities. This places the person at risk of having their payments suspended or cancelled with the resultant issues that arise such as homelessness.
Given the number of people we see who are falling between the cracks, it is becoming increasingly evident that, at present, the social security system does not always provide sufficient flexibility to enable staff to effectively service these people.
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