Media Release: Economic Justice Australia welcomes Robodebt Royal Commission

Leanne HoLatest news, Media release, News & media, Policy

Economic Justice Australia welcomes Minister Shorten’s announcement today of a Royal Commission into Robodebt.

“The announcement of a Royal Commission represents a crucial step in acknowledging the harms to some of the most vulnerable people in our community caused by this defective Centrelink compliance scheme”, said EJA CEO Leanne Ho.

“Our community legal centres representing people through the administrative appeals system saw first-hand how people were traumatised by receiving robodebt notices for thousands of dollars when they had faithfully declared their income, and sounded the alarm about the flawed income averaging process.”

Despite the refund process initiated in June 2020 and the $1.2 billion class action settlement in November 2020, redress for victims of Robodebt has been limited. People who did what they were told, and provided their payslips to Centrelink when their Robodebt was raised by the system, were essentially disadvantaged. This was anomalous – by giving Centrelink the means to recalculate their debt manually, their debts were no longer solely based on the automated averaging system and they could not access the refunds won through the class action.

“The Royal Commission is an opportunity to expose the harms to everyone impacted by Robodebts, including people who faced barriers to navigating the appeals system and those who didn’t have the benefit of a refund through the class action. Importantly, the Royal Commission will also provide acknowledgment that proper redress would compensate people for their pain and suffering beyond the simple refund of the debt amount”, said Ho.

Economic Justice Australia sees the Royal Commission as an opportunity to learn from Robodebt and apply the lessons to ensure accountability and fairness in automated decision-making moving forward – especially given ongoing and increasing automation in social services.

“Problematic automation in social security administration did not end with the Federal Court case or the class action. We see examples of automation happening in the social system right now which continue to create barriers to accessing payments, problems with debts and barriers to appealing decisions. The lessons learned through the Royal Commission should guide strategic policy development to avoid repeating these mistakes”, said Ho.

The Royal Commission will examine automated debt assessment and recovery practices used by Centrelink back to April 2015 when the “Online Compliance Intervention” started, and up to 16 November 2020 when the Government consented to Federal Court orders that the Robodebt scheme was unlawful. However, matching of a person’s ATO employment income data against information provided to Centrelink has been going on for years – starting way before 2015.

“Income data-matching and averaging has a legitimate role to play in ensuring that Centrelink payments are accurate. However, employment earnings data-matching should just be the starting point of any inquiry. Prior to 2015, data-matching with the ATO was used as a tool for identifying possible overpayments. This triggered further investigation by Centrelink with human delegates checking the person’s actual income for that period, not merely having an automated system mindlessly generating debts based on averaging over a different period”, said Ho.

A big part of the problem with Robodebts was that the onus of proof was reversed. People issued with debt notices had to prove they did not owe the debt, rather than Centrelink having to prove that the debt existed, was correctly calculated – and legally recoverable.

“Many clients contacting our legal centres said Centrelink refused to review their debt unless they provided detailed evidence. For many people this was an impossible task given that Centrelink had provided them with minimal information about what caused the debt, and how it was calculated – a problem we see continuing to this day”, said Ho.   

The Royal Commission is also an opportunity to look at how our system of administrative review failed people with Robodebts.

“It should not have taken over five years, and a Federal Court class action, to address the illegality of income averaging on a systematic level, especially when the Administrative Appeals Tribunal had already made decisions finding there was no legal basis for the debts we were assisting our clients to appeal. This raises serious questions about how well these mechanisms ensure accountability”, said Ho.

CASE STUDY:   Brianna was 28 years of age when she was first contacted as part of an OCI system review.  At the time she had been diagnosed with PTSD as a result of a serious sexual assault the previous year and was in the middle of the court process which ultimately resulted in the conviction of the offender. Brianna was highly distressed and suicidal at the time. In response to a compliance officer’s request, Brianna provided payslips but was told that the payslips she had provided did not cover the correct period.

Over the following months Centrelink sent Brianna multiple debt notices totalling nearly $10,000, each notice informing her she was required to repay the debt immediately. Brianna firmly believed that the debt was not right and made multiple attempts to appeal Centrelink’s decision. Centrelink finally conducted a review by an Authorised Review Officer. The review failed to correct the unlawful calculation of Brianna’s debt, even though the review officer had evidence to show the debt calculation was incorrect. An interest charge was later applied to Brianna’s debt as she did not agree to repay the amount Centrelink was demanding. Centrelink then garnisheed Brianna’s tax return. Brianna was only notified of the garnishee after the fact. At the time, she was unemployed and unable to pay her rent.

Brianna sought assistance from the Welfare Rights Centre, who represented her in an appeal to the AAT. The Tribunal set aside the debt on the basis that it was based on false assumptions about her earnings. This was over eight years after Centrelink had first contacted Brianna as a result of the OCI system compliance review which led to the raising of the debt.

By providing pay slips, Brianna provided Centrelink with the means to recalculate her debt, meaning she would likely not have received a refund through the Robodebt class action. Fortunately, she was able to have the debt wiped by the Tribunal with the assistance of one of our legal centres.

MEDIA CONTACT: Leanne Ho (Chief Executive Officer) M: 0448 007 201 E: