The automated system leaving welfare recipients cut off with nowhere to turn

Luke Henriques-Gomes

Bad news comes to Australia’s welfare recipients in different ways.

Sometimes, the message comes in the post. More often than not, though, word arrives through a special email portal, or by text to a smartphone. The sender always says the same thing: “Your payments have been suspended.”

It happened to Keelan two months ago. He got a notification on his MyGov account, the online portal he uses to receive emails from Centrelink, Australia’s social security agency.

The 26-year-old has been surviving on Australia’s jobseekers’ payment, Newstart allowance, ever since his medical conditions – anxiety, depression and OCD – started affecting his studies.

His payments – A$600 a fortnight – were automatically stopped because he missed a phone appointment. It mattered little that he was not in a great state at the time.

“I wasn’t sure what day it was because my OCD was quite bad,” Keelan tells the Guardian. “I got a phone call that I didn’t register. It turned out to be Centrelink and they cut off my payments. And I didn’t hear from them again after that.”

Keelan, who did not want his surname published, says he spent hours on the phone over several days trying to get his welfare payments back. Most of the money was delayed for about a week. He was broke and couldn’t afford his medication.

When he doesn’t take his meds, “it sort of throws off my day-to-day function to the point where I can’t complete a sentence,” he says. “My condition just gets worse and I go into a downward spiral where I need to go into care sometimes.”

These suspensions are becoming increasingly common and will be considered by the UN special rapporteur on extreme poverty and human rights, Philip Alston, who is examining the impact of digital technology on social safety nets around the world.

‘People are left without anywhere to turn’

Australia’s welfare system is often touted by its politicians as the most efficient and the envy of the world.

Bureaucrats and politicians alike have embraced technology and automation with open arms. As part of a sweeping digitisation push slated to finish in 2022, benefits claims are now conducted online. Since 2013, welfare recipients have been pushed away from Centrelink shop fronts and on to the MyGov online portal.

The centre-right coalition government is already facing legal action over its Robodebt scheme, which critics say uses a flawed algorithm to accuse benefits recipients of owing a welfare debt. But there have been other, less-remarked-upon changes, too.

Last year, the government overhauled the way it sanctions welfare recipients accused of gaming the system. In a briefing to the privately run job service agencies that administer the new policies, an official summed up the changes: “Processes will be automated as much as possible to simplify administration.”

Welfare advocates say the consequences have been disastrous. In the space of a year, the new policy has increased the number of welfare payment suspensions to 2.7m.

In 12 months, welfare payments were stopped an extra 1m times.

“There’s a shifting of decision-making that is increasing the amount of automatic suspensions,” says the policy analyst Simone Casey.

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Under the most recent changes, the government has prioritised welfare suspensions over sanctions, in which a person has their payments docked for doing the wrong thing. These penalties, which used to be applied manually by a staff member, have dropped significantly. Instead, a recipient’s money is cut off automatically until they satisfy their job agency consultant that they are committed to looking for work.

Casey, who used to engage with the government regularly in her work as a policy analyst adviser to not-for-profit job agencies, says that over time consultants have been handed less decision-making power over how to penalise – or not – the welfare recipients they are employed to help.

Consultants have less discretion when a welfare recipient does not turn up to an appointment or misses another compulsory activity. They enter a code into a system that automatically triggers a payment suspension.

The same goes when the welfare recipient fails to report their income or confirm they met their job search requirements via digital channels.

Money is stopped first, and questions are asked later. The idea is that this will encourage people to follow the rules.

“In some cases it’s left single parents without money for food for their children over a weekend because they haven’t logged in and reported their attendance,” says Adrianne Walters, a senior lawyer at the Human Rights Law Centre.

“And so the computer says, ‘No payments’. And then that person is left without anywhere to turn until their employment service provider opens up again on the Monday.”

The National Social Security Rights Network represents community legal centres who take calls daily from welfare recipients that feel wronged by the system.

“We’re definitely seeing more people call up because of automation,” says Jai Manoharachandran, a policy officer at the network.

“When you’re living paycheck to paycheck, every little bit counts. And the idea that you might have to try and stretch your income for a few days before you get back-paid, it’s incredibly stressful for clients. They often don’t understand why their payments have been suspended.”

Rebecca Johnson, 39, lives in Perth, in Western Australia, with her 21-year-old son. He has autism and also receives government benefits. She says she “honestly can’t remember” how many times her payments have been suspended.

Since the new policies were introduced, about 50,000 suspension notifications now go out to welfare recipients across the country each week.

When they contact their job agency, the consultant decides whether or not they had a fair reason for missing their appointment. If not, they are given “demerit point”, which can lead to harsher penalties.

But analysis of government statistics by the Guardian shows about 75% of the time, benefits recipients who had their payments suspended under the new system were not at fault. The data shows payments were suspended 2.7m times in 12 months, but only 654,ooo demerits were handed out.

Related: ParentsNext: 80% of recipients who had payments suspended not at fault, data shows

The Guardian has tracked the new system since it was rolled out, finding that the homeless and single parents are disproportionately impacted. In six months, 55,000 homeless people received a suspension; yet there are only about 60,000 homeless people receiving welfare at any given time.

Meanwhile, across a controversial welfare-to-work program for single parents with children under five, 85% had their payments suspended automatically but were later cleared of wrongdoing. The overwhelming majority were single mothers.

On one occasion, Johnson says she had her welfare cut after she was given four phone appointments with her job agency over 10 days.

“I was at work and they just kept changing them with no contact,” she says.

“There was no contact as to what was really going on. Just I kept getting these text messages saying that you’ve got appointment on this day, you got an appointment on this day.”

The last text in the chain, shown to the Guardian, says: “Your payment has been suspended for not attending your provider appointment. To restore payment you need to attend a provider appointment.”

The government says payments are turned back on once people re-engage with the system. But observers say it doesn’t always work like this in practice.

Manoharachandran tells the story of one client who was already broke when her welfare payments were suspended.

“She didn’t have money for the train to go to her job service provider,” he says. “She had no money for food or other essentials. So basically, she needed to get the suspension lifted as soon as possible. She ended up riding the train without a ticket and picking up a $200 fine.

“And then when she got to the provider, they initially told her they couldn’t see her that day and she’d have to come back the next day to re-engage and get that suspension lifted. She didn’t even have the money to get home. She’d already incurred a $200 fine getting there.”

For Johnson, the suspensions mean stress and hoop-jumping at best. Other times, it’s much worse. “You virtually have no money left,” she says of living on Australia’s unemployment benefit, which is among the lowest in the OECD.

The last time her payments were suspended, she had no money for the weekend. And it wasn’t even her fault: a system glitch with the digital app meant she could not report her income to Centrelink.

“You try and do the right things, you still get punished,” she says. “That’s the way I see it.

‘The system is geared to be very aggressive’

The most vocal critic of this system has been Rachel Siewert, a senator with the Australian Greens.

“The system is geared to be very aggressive towards job seekers, and people looking for work,” she says. “This is what we predicted would happen given the way the system is set up.”

Over time, people receiving benefits in Australia have been given more responsibilities. Increasingly, this involves using technology – an online portal or smartphone app – to regularly report information back to the government.

The government has also established a trial for welfare recipients engaging with job agencies. In time, it hopes a large proportion of them will not go into an office for help and will instead deal with their consultant using an online platform.

Siewert is not convinced it will work. “I’m not having a go at technology but that it can make it harder,” she says. “You’ve also got certain groups of people that don’t have the same digital skills.

“I’m not saying older all older people don’t understand technology, but many of them don’t. They’re finding themselves unemployed, later in their career, they may have been involved in an industry that didn’t have to become particularly technically literate, and they are also being alienated through the approach.”

The same goes for Johnson’s son, whose autism means he struggles to navigate the increasingly digital system. He sometimes forgets to report his income to Centrelink. That does not trigger a phone call asking him what happened, just a payment suspension.

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“I have to remind him so we don’t get paid for a day or two later until you report,” Johnson says.

The government is convinced the new system is working. Despite the huge increase in welfare payment suspensions, it says most people end up having their payments restored before they are delayed.

Moreover, the new system has one clear benefit in its eyes. It is expected to save a few hundred million dollars.

Critics say the true cost is felt by people engaging with the system. Walters, of the Human Rights Law Centre, points to a study by researchers from the University of York that found welfare penalties were ineffective.

“That’s that starting point, you’ve got a program that is causing the stress to Australian families,” she says. “And when you automate that programme, we automate the decision-making, you essentially turbo-charge those impacts.”

Johnson’s phone and email are full of messages telling her about her suspensions. She argues she should at least have a phone conversation with someone before her income is stopped.

But she’s used to getting those notifications now. What does she think when she gets the news?

“Oh, I don’t know I probably just, ‘Again?’ There’s always something,” she says.

“It’s never-ending. ‘What have I done this time?’ Or just another drama to deal with. ‘I don’t have time for this crap.’ That’s what I feel like.”