A critical test case is being heard in the Federal Court today regarding the unlawful practice of income apportionment, which has harmed countless people receiving welfare payments over many decades.
Income apportionment was a method previously used by the Department of Social Services (DSS) to recalculate alleged overpayments, by averaging income over weeks that do not align with the Centrelink reporting period. A Commonwealth Ombudsman report from 2023 found the methodology used unlawful, calling into question the validity of dozens of criminal prosecutions and tens of thousands of debts.
Since the issue was discovered, the extent of the problem has been found to be much greater, potentially affecting more than two million Australians.
The case being heard today is about what happens next – in what circumstances can Centrelink raise a debt, and how are debts properly calculated.
“The fact we’re here again is shocking. The legality of a Government measure that determines people’s social security is being called into question, which should be a huge scandal by any metric – but it is coming off the back of Robodebt, of countless ‘IT glitches’, of any number of issues with Government systems that have been proven to be insufficient at best and, in some cases, outright illegal,” says Economic Justice Australia (EJA) CEO Kate Allingham.
“It is impossible for the public to have any trust in the Government if, not only are systems put in place to protect people found to be deficient, but they continue to be used for years unlawfully without any apparent checks and balances.”
While this test case concerns an individual’s matter, the issue is far from standalone. Given the scale of the issue, the cost to Government to recalculate and reissue debt notices would be significant – and is likely to cause further emotional and financial distress to many in the community. EJA is calling for the Government to:
- Waive all current debts calculated via income apportionment;
- Implement a 6-year limitation on debt recovery as recommended by the Robodebt Royal Commission;
- Increase funding for specialist social security legal services to undertake public interest advocacy and to provide legal assistance to those impacted, as recommended by the Robodebt Royal Commission.
EJA member centre lawyers, as well as Legal Aid commissions, have developed extensive insight and expertise into the systemic issues within the social security system over many years of experience.
This expertise resulted in Federal court and other advocacy on Robodebt by Victoria Legal Aid, culminating in $1.76 billion in waived and refunded Robodebt issued to more than 440,000 people. Today Legal Aid NSW is intervening in proceedings to assist in ensuring that, where DSS seeks to raise debts, they must do so with the proper standard of evidence to support them and adopt robust and clear processes that limit the financial distress and confusion for those impacted.
The Robodebt Royal Commission, of which the partial purpose was to ensure a similar disaster never happened again, recommended increasing funding to social security legal services to protect against future instances of harm and misconduct. Since then, and in the absence of any sufficient funding injection from Government, cascading scandals have continued to prove this need – at great cost to millions of Australians.
“These are not simple mistakes someone made at their job. Centrelink debts can significantly reduce people’s already meagre payment. The fact an unlawful system has been allowed to continue unchecked for decades underpins what was found in the Robodebt Royal Commission, which is that the Government needs to adequately fund social security legal services that assist people in navigating these issues. Millions of people have already been affected by successive Governments’ proven inability to do so themselves,” says Ms Allingham.
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Media contact: Kirsty Sier | 0435 075 085 | kirsty@ejaustralia.org.au