Australian court case reveals flaws in ‘robo-debt’ benefits programme

By on 28/11/2019
Centrelink will no longer calculate welfare recipients’ debts based solely on averaged income data. (Image courtesy: David Jackmanson/flickr).

The Australian federal government has conceded, in a landmark court case, that failings in the country’s controversial ‘robo-debt’ programme led it to unlawfully demand that citizens repay non-existent debts. The case has prompted the Senate to demand that government release details of legal advice it received – believed to have warned that it was disobeying the law – in the name of transparency, according to The Mandarin.

The flawed debt-calculation system calculated people’s income over short periods, assumed that their earnings had remained steady throughout the year, and used that data to work out whether they had been overpaid benefits. The assumption was often false – but claimants were chased for these ‘debts’, and the onus was placed on them to prove that the claim had no merit.

Centrelink, the agency responsible for making social security payments, has long used automated systems for calculating income, but the robo-debt programme was expanded in 2016 under then prime minister Malcolm Turnbull. Prior to the court case, the government had not acknowledged that a large number of the debts sought over several years were either inflated or non-existent.  

About-turn

Last week, in an apparent about-turn, Australia’s government services minister Stuart Robert announced that Centrelink will no longer calculate welfare recipients’ debts based solely on averaged income data. Bank statements or pay slips will now be used when reconciling welfare recipients’ fortnightly income declared to Centrelink and annual income reported to the Tax Office, according to the Sydney Morning Herald.

Robert said Centrelink will “reach out” to the “small cohort” of Australians who have received debt notices based solely on income averaging to “seek further points of proof”.

He has been criticised for playing down the number of people and cases thought to be involved. A Services Australia submission to a recent Senate inquiry suggested the number of robo-debt cases could top 220,000, at a conservative estimate. Legal Aid Victoria puts the number of people affected at nearer 500,000, while the Community and Public Sector Union (CPSU) says it is aware of more than 600,000 individual debts that are now “in question”.

Robert called the change to the way income is calculated one of a series of “refinements”, did not admit that mistakes have been made, and said the government makes “no apologies for fulfilling our legal obligations to collect debts with income compliance”.

Landmark legal case

However, the landmark case, brought to the Federal Court by Victoria Legal Aid on Wednesday, has ramped up pressure on government to accept blame for robo-debt’s failings and to begin making more significant reparations. The case forced government lawyers to admit that Centrelink had no right to demand payment of debt from one claimant, Deanna Amato.   

The government has faced a number of robo-debt-related legal challenges over the years, but until now all had been settled out of court.

The case prompted senator Rachel Siewert of The Greens party to ask government to release the legal advice it had received over the controversial debt-calculating method by 10am on Wednesday, but the government refused, claiming it would be against the public interest.

Siewert rejects this. “Clearly this government has something to hide,” she said on Thursday, as reported by The Mandarin. “They continued with this draconian program long after the harrowing evidence of the Senate inquiry in 2017 and the recommendation that it be put on hold while issues of procedural fairness were dealt with and long after the major flaws with the income averaging process were identified.”

“We need to know when and for how long the government had information on the legality of robodebt,” she added.

CPSU national secretary Melissa Donnelly said frontline Centrelink staff warned their bosses that “serious problems” would arise from the debt collection programme before it began, according to The Mandarin.

Donnelly said the court case decision will put more pressure on an already understaffed workforce, adding that CPSU members are calling on the staffing cap to be lifted so that they can “clean up the mess [current prime minister Scott] Morrison’s government has created”.

About Mia Hunt

Mia is a journalist and editor with a background in covering commercial property, having been market reports and supplements editor at trade title Property Week and deputy editor of Shopping Centre magazine, now known as Retail Destination. She has also undertaken freelance work for several publications including the preview magazine of international trade show, MAPIC, and TES Global (formerly the Times Educational Supplement) and has produced a white paper on energy efficiency in business for E.ON. Between 2014 and 2016, she was a member of the Revo Customer Experience Committee and an ACE Awards judge. Mia graduated from Kingston University with a first-class degree in journalism and was part of the team that produced The River newspaper, which won Publication of the Year at the Guardian Student Media Awards in 2010.

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