Cancer-stricken grandfather reveals Centrelink debt collectors hounded him for money in hospital

‘I’m classed as a criminal’: Cancer-stricken grandfather breaks down in tears as he reveals Centrelink debt collectors hounded him to repay $2,300 while he was in HOSPITAL

  • Raymond Murphy was hounded over a $2,300 debt from Centrelink in hospital
  • He is a victim of robo-debt, with many claiming to have been incorrectly debted 
  • The grandfather was forced to sell his house to pay for his cancer treatment
  • Australians must prove they have no debt to rid themselves of the scheme
  • Over 4,000 victims are taking part in a class action against the government 

A cancer-stricken grandfather has broken down in tears revealing how Centrelink debt collectors hounded him for repayments while he was being treated in hospital.

Raymond Murphy is one of thousands of Australians affected by the controversial robo-debt scheme, where Centrelink uses data from the tax office to determine if a welfare recipient owes the welfare agency money. 

Mr Murphy told A Current Affair he was targeted while he was being treated for cancer over $2,300 debt collectors claimed he was overpaid by Centrelink years ago. 

‘They’re severe, absolutely totally severe. They have no respect for me at all… For a measly $2,300, I’m getting ripped to shreds,’ Mr Murphy said.  

Raymond Murphy was targeted by Centrelink debt collectors over what the claimed was a $2,300 outstanding debt while he was in hospital receiving cancer treatment

Mr Murphy said the debt forced him to sell his house and move into a shed to afford his cancer treatment.

Australians affected by robo-debt must prove to the government they do not owe any money, forcing victims to search for all relevant documentation to clear their names.

‘I am classed as a criminal, and I am guilty, and I have to prove my innocence. But in that, they can’t supply the paperwork to prove how they came about to say I had a debt,’ Mr Murphy said. 

Mr Murphy was forced to sell his home and move into a workshop to pay for his cancer treatment after being hounded in hospital by Centrelink debt collectors

Mr Murphy was forced to sell his home and move into a workshop to pay for his cancer treatment after being hounded in hospital by Centrelink debt collectors

This week, Centrelink announced it will no longer assess debt by averaging tax office information with their data, with the Department of Human Services telling staff to conduct further investigations to determine whether a debt exists. 

‘We don’t ever want people to feel they’re in a situation of helplessness,’ Department of Human Services General Manger Hank Jongen said.

‘We help people facing difficult situations every day and we do our best to consider any special circumstances.

‘Support and help is always available from us and a wide range of government and community services.’ 

It was recently revealed in a Senate committee hearing the estates of up to 200 dead people were pursued in the robo-debt scheme.

About one-fifth of initial debt notice letters sent by Centrelink included information that was later proved to be wrong. 

Labor frontbencher Bill Shorten said the government had ‘hit the emergency brakes’ on the failed system.

‘If the system is dodgy enough it needs to be junked, then what happens to all those people who have already been victims of robo-debt?’ he said.

‘What happens to the money obtained improperly by the Commonwealth?’

Centrelink announced it will no longer conclude debt by averaging tax office information with their data, with the Department of Human Services reportedly telling staff to conduct further investigations to determine whether a debt exists

Centrelink announced it will no longer conclude debt by averaging tax office information with their data, with the Department of Human Services reportedly telling staff to conduct further investigations to determine whether a debt exists

Statement from the Department of Human Services

The Department of Human Services is making changes to our administration of the online income compliance programme.

The Department will no longer raise a debt where the only information we are relying on is our own averaging of Australian Taxation Office income data.

This is in line with our ongoing commitment to continually strengthen and improve our service delivery.

We will work through all previous online compliance debts to determine those which did not use other information.

As these cases are identified, the debts will be frozen while we look more closely at them. People do not have to do anything for this to happen. We will write to people to advise we have stopped recovery activity if they are affected.

Normal debt recovery activity will continue until and unless people are identified as being affected.

It is very important to note, this kind of income averaging doesn’t occur in most compliance reviews and debt decisions.

It only applies to a relatively limited proportion of debts – those arising from the online income compliance programme where we have used only income averaging.

People not impacted by this advice can still ask us to reassess decisions or provide new information at any stage of the process.

We remain committed to the integrity of our welfare system and will continue to ensure people are only paid benefits to which they are eligible.

We reiterate people affected by these changes do not have to do anything at this stage. If people do have questions, they can call 1800 061 838 for assistance.

Government services minister Stuart Roberts said Australians who have been affected by debts based on income averaging will be contacted soon by his department, with no mention of victims being paid back or compensated.

Over 4,000 victims of the robo-debt scheme are taking part in a class action against the government, with Peter Gordon from law firm Gordon Legal saying that those effected by the scheme should be reimbursed.

‘There are thousands of people who’ve lost accommodation, lost jobs, suffered from mental health issues,’ Mr Gordon said.

Mr Gordon’s firm believe more than 220,000 debt notices could be incorrect, with the government owing $660million to people who have been billed incorrectly.   

The devastating impact of the robo-debt scheme

Kath Madgwick’s son Jarrad took his own life three hours after he got a letter saying he needed to discuss a Centrelink debt of $2,000.

‘Personally I am pleased they are doing something but I still think it is not enough. Using the averaging system should be scrapped altogether as people perceive the initial letter as a debt letter. I do not think this is good enough,’ Ms Madgwick told Daily Mail Australia.

‘There are been reports of people taking their lives over this system backdating two-and-a-half years.

Jarrad Madgwick (pictured with his mother), 22, took his own life after he was told he had a Centrelink debt

Jarrad Madgwick (pictured with his mother), 22, took his own life after he was told he had a Centrelink debt

‘I am not opposed to the government organising a payment plan to recover legitimate debts but the averaging robodebt system needs to be scrapped and a more effective measure put in place. As the averaging of income has proven without a doubt to be a failure. 

‘Whilst I am pleased the Government are doing something I do not feel that it is enough and will not continue to distress vulnerable people so much that they make a decision to take their own life over it.’ 

For confidential support call the Lifeline 24-hour crisis support on 13 11 14 or Mensline 1300 789 978    

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