08/03/2017 12:24 PM AEDT | Updated 08/03/2017 12:36 PM AEDT

Centrelink: An Agency In Crisis, Aggression And Fear

So a Senate inquiry hears.

CANBERRA -- The rollout of Centrelink's controversial robo-debt program has been accused of creating a "climate of fear" in the Australian community and has been described as an "abuse of government power".

And the automated data-matching debt recovery system, which has affected more than 200,000 people, has created fear amongst staff as they battle with customer aggression and management suspicion in the wake of the implementation of the system.

That's the message from the nation's peak welfare advocacy group, the Australian Council of Social Service, and the main public service union, the CPSU, as they appeared before a parliamentary committee investigating the automated debt recovery system program in Canberra.

"It is really important to understand the power dynamic here," ACOSS chief executive Cassandra Goldie told the committee.

"The Department of Human Services plays such a critical, powerful role in Australian society. We call it a safety net, let's not forget the importance of that."

The system involves a reliance on data matching income reported to Centrelink and separately to the Australian Tax Office, but as mistakes are found, and debts are called in regardless, public confidence in government programs has been undermined, the inquiry told, as "people fear retribution".

"What this system has done is create a climate where people have been frightened, indeed people have been bullied, into complying," Goldie said.

The human interface has been withdrawn and irregularities or mistakes are allegedly going unnoticed. Debt notices are issued after three weeks without a response and debt letters have been sent to a significant number of old addresses.

ACOSS told the inquiry around 6,600 people didn't know they had an alleged debt until contacted by an external debt collector, a use which has been accused of possibly breaking consumer laws.

Goldie said people are taking take time off work to deal with Centrelink debts. When a customer attends Centrelink, they are encouraged to a "self-service portal" even if staff can see an easy fix to a problem.

And staff are told not to go near errors they may find in a client's case if those mistakes have not been brought up by the client.

"The impact of this rob-debt system, as it has come to be known, has been to cause extensive distress and suffering right across the community with thousands of people affected," Goldie said.

"In the lead-up to this program being unleashed there was a perception created that if you do not comply, you may go to jail.

"We believe the actions of the government has culminated in creating a serious climate of fear around this program."

The CPSU, which represents Centrelink workers, told the inquiry staff are under increasing pressure by management and are dealing with increasing aggression from clients, including spitting.

"It isn't an exaggeration to say that the Department of Human Services is an agency in crisis," CPSU national secretary Nadine Flood declared.

Staff are scared to talk to their union about their concerns, according to Flood, and their emails and social media are being monitored as management clamps down on internal dissent.

The Department of Human Services will appear before the Committee later Wednesday.