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Prosecutors have been forced to pause criminal proceedings against 32 people after a Services Australia bungle, in which up to 100,000 welfare recipients’ income had been incorrectly calculated and led to some wrongful debts.

Two weeks ago, the Commonwealth Ombudsman issued a report which found that between 2003 and December 2020, Services Australia used “unlawful” miscalculations when assessing some social security payment rates.

The report related to “income apportionment” in which authorities incorrectly spread employment income over two or more fortnights to calculate Centrelink payments.

“Our investigation found Services Australia and its predecessor the Department of Human Services had been spreading employment income evenly over two or more Centrelink instalment periods (Centrelink fortnights), in circumstances where this was not permitted by social security law,” the Ombudsman’s report found.

“This approach, known as ‘income apportionment’, could result in customers’ employment income being assessed in the wrong Centrelink fortnight, which could in turn result in their fortnightly Centrelink payment being over or underpaid.”

The Ombudsman found that the “Income Apportionment” issue was different from Robodebt, which related to the incorrect application of income averaging.

“A central criticism of the Robodebt scheme was that many debts were calculated and issued with little or no human intervention,” the Ombudsman said.

“By comparison, ‘income apportionment’ relates to a method Centrelink used to calculate some payment rates, which Services Australia and (the Department of Social Services) have accepted is unlawful because of an incorrect application by decision-makers of … the Social Security Act prior to 7 December 2020.”

After realising the error, Services Australia paused 13,000 debt reviews and another 87,000 cases were identified as possibly being affected.

Since Services Australia refers criminal allegations to the Commonwealth Director of Public Prosecutions (CDPP), the Ombudsman found that the incorrect calculation using “income apportionment” could impact some criminal proceedings.

The CDPP said in a statement that 32 cases currently before the courts had been adjourned.

“The CDPP is working with Services Australia in relation to income apportionment as Services Australia and the Department of Social Services are addressing this issue,” a spokesman said.

“There are 32 defendants before the courts which have debt calculations that have been identified to us by Services Australia as being affected by income apportionment.

“All 32 matters have been adjourned and the CDPP has taken or is taking steps in relation to these matters to ensure these defendants/courts are advised.”

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By Rahul

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