Centrelink's contentious debt recovery system is making some of the targeted people feel suicidal, independent MP Andrew Wilkie has claimed, as the furore over the clawback persists despite the government's insistence it is working exceptionally well.
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The Tasmanian MP said the Commonwealth Ombudsman had agreed to his request to look into the matter, which has come under criticism from the Labor Party and others for targeting some innocent recipients of social security payments with a flawed data-matching calculation, sometimes years after payments had been received.
"I've had people who have approached me who have been frightened, absolutely scared, people who are paying this money because they are so frightened by this very official letter," Mr Wilkie said on Wednesday.
"I've had four people now approach me in my office who I would describe as presenting as suicidal and in all those cases we've taken what action we thought was appropriate."
He said it was important for legitimate debts to be recouped but accused the government of "boasting about getting their budget back into the black by clawing back money from people who don't owe them money".
"I'm not blaming Centrelink for this, I'm blaming the government. I'm blaming the relevant ministers, I'm blaming the PM who is responsible for his government.
"And I'm making the point in the strongest and clearest possible terms: it is not good enough for a minister to stand up yesterday or today and to crow about something that is terrifying Australians and bringing some Australians to the brink of suicide," Mr Wilkie said.
Using the system in place since July, Centrelink has been sending out 20,000 debt compliance letters a month - up from 20,000 a year.
Social Services Minister Christian Porter said $300 million, of a total $4 billion target, had been recovered.
Speaking on the ABC's 7.30 program on Wednesday night, Mr Porter repeatedly emphasised that the government's responsibility was to taxpayers, and they would continue data-matching even though it may make some people "upset".
"I don't think [it] is an unfair or unreasonable system," Mr Porter said.
"We have a responsibility to the taxpayer to make sure that welfare recipients are not overpaid. Where there is an information which is available to us as a government which suggests that the earnings reported to Centrelink are different to the earnings reported by the employer to the ATO, we have a responsibility to check and to seek further information. We can't abrogate that responsibility because in a small number of cases people might be upset by the inquiry."
After receiving the letter, people are given 21 days to confirm or update information, after which any debts are pursued. Some people have been required to provide supporting documentation like pay slips and bank statements.
A spokeswoman for the Commonwealth Ombudsman said they were aware of the issues raised by Mr Wilkie and "we are are currently seeking further information from Centrelink".
Mr Porter has defended the process as working "incredibly well" and said the complaint rate was running at only 276 from 169,000 letters, or 0.16 per cent.
But critical MPs dispute this, contending that they have been fielding frequent complaints themselves and that the number of people being wrongly targeted with the initial notice of a discrepancy is too high. According to Mr Porter, roughly 20 per cent of people who have been asked to clear up details have had no debt payable.
He said issues that do arise, like an employer erroneously being counted twice in calculating people's incomes, were easily resolved.
"So the person receives the letter, they go online, they explain that, the matter ends," Mr Porter told 2GB radio.
"But the notion that Labor has put out there, that because of the fact that some people are able to explain the discrepancy, which we fully expect, that we should stop this process is, I've got to say, on the edge of ludicrous."
Mr Wilkie said he had received more than 100 complaints, including one woman who received a notice saying she owed $69,000.
"More money than she even received from Centrelink. And when she queried it, was told, 'Oh, sorry it was a typo. It is actually $3000,' " he said.
He mentioned other people whose debts were mysteriously and repeatedly reduced when queried.
"The government needs to shut it down, to send letters to everyone who has got a letter and say it has been shut down, and it will be looked at afresh," he said.
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