In July 2016
the Department of Human Services (DHS) - Centrelink launched a new online
compliance intervention (OCI) system for raising and recovering debts.
Its aim was
to raise up to $1 billion dollars allegedly owed by welfare recipients.
This
compliance intervention became known colloquially as robo-debt.
Current
Australian Prime Minister and Liberal MP for Cook Scott Morrison was federal treasurer for the first two years of the
ongoing robo-debt scheme.
During this
time the suicide of welfare recipients being pursued for so-called debt
recovery began
to be reported.
Since 2016 only a small number of welfare recipients have brought their robo-debts before the Administrative Appeals Tribunal for adjudication. It has reportedly set aside 34 per cent of these robo-debts (or one in every three) and varied another 2,4 per cent.
Most welfare recipients don't have the resources to fight these alleged debts.
The
Guardian, 18 December 2018:
Centrelink’s “robo-debt”
system is a form of illegal extortion allowed by failings across a “plethora”
of democratic and legal institutions, according to a former member of the
administrative appeals tribunal.
Prof Terry Carney, a
long-serving member of the AAT, has penned an extraordinary attack on the
institutional failings that allowed the
robo-debt program.
It’s the second time
Carney, who helped oversee the writing of Australia’s social security laws, has
used academic journals to condemn the
system as illegal this year.
Carney’s last
paper said robo-debt involved the enforcement of “illegal” debts that
in some cases were inflated or nonexistent, an allegation that was forcefully
rejected by the Department of Human Services. Hank Jongen, the department’s
spokesman, said at the time that the department “strongly refutes any claims
that it has conducted its compliance activities in a manner which is
inconsistent with the legislation”.
This time, Carney used a
piece in the Alternative Law Journal to map out the numerous shortcomings that
allowed the system to come into being and operate for 18 months without
challenge.
“The pivot for this article is not so much
that Centrelink lacks legal authority for raising virtually all debts
based on a robo-debt ‘reverse onus’ methodology rather than use its own
information gathering powers – for this remains essentially uncontested,” he
wrote. “Rather it is extraordinary that this went unpublicised and uncorrected
for over two years.”
Centrelink has long used
a system of automated data-matching to detect discrepancies in income reported
by welfare recipients, to detect and claw back overpayments. But it introduced
significant changes from July 2016, reducing human oversight and expanding the
system considerably in a bid to recover more debts and improve the budget. The
new system effectively
shifted the onus onto the welfare recipient to prove they owed no debt
to the government.
The system spat out
letters to individual welfare recipients as soon a discrepancy was detected in
their reported income to Centrelink and records held by other agencies, like
the tax office.
A flawed process
was used
to calculate their debt if they did not respond or could not produce
evidence of their previous pay, which involved averaging out their yearly
income across all 26 of Centrelink’s fortnightly reporting periods. The process
often led to the false assumption that a welfare recipient had worked across an
entire year and was ineligible for social security, thereby creating a debt.
Carney argues the rushed
design of what he described as a “machine-learning budget ‘savings measure’”
trumped good design standards. He says inquiries by the auditor general and the
commonwealth ombudsman into the system had failed to consider whether it was
raising debts on a lawful basis.
Carney also argues that
Centrelink, by pursuing debts raised through the controversial “income
averaging” technique, has failed to adhere to ethical administration. He says
Centrelink has continued to use this method, despite knowing AAT rulings that
it is invalid…….
The privacy safeguards
in the first tier of the AAT mean that most legal challenges against welfare
debts are not publicised, he writes. That means that “rulings overturning
Centrelink reasoning remain hidden from the public”…..
TERRY
CARNEY AO, Emeritus Professor, University of Sydney, Centre for Health
Governance, Law and Ethics, 2018:
* Alternative
Law Journal, Robo-debt illegality: The seven veils of failed guarantees of the rule of law?
* Australian
Public Law, Robo-Debt
Illegality: A Failure of Rule of Law Protections?
* UNSW Law
Journal Forum, The
New Digital Future For Welfare: Debts Without Legal Proofs Or Moral Authority?
* University of
New South Wales Law Journal, Vulnerability:
False Hope For Vulnerable Social Security Clients?
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