Faced with three court cases which will inevitably expose the shaky ground on which the Centrelink income compliance program - aka robodebt - was built in July 2016, the Morrison Government now makes a limited, tactical response ahead of court hearings.
ABC News, 19 November 2019:
The Federal Government is immediately halting a key part of the controversial robodebt scheme to recover debts from welfare recipients and will freeze some existing debts, in what appears to be a major backdown in the operation of the scheme.
In an urgent email circulated to all Department of Human Services compliance staff today, seen by 7.30, the general manager of the debt appeal division wrote:
"The department has made the decision to require additional proof when using income averaging to identity over payments.
"This means the department will no longer raise a debt where the only information we are relying on is our own averaging of Australia Taxation Office income data."
The averaging process has long been one of the most controversial parts of the scheme.
Legal groups have said that it causes inaccuracies in the debt amounts, and wrongly shifts the burden of proof onto alleged debtors.
The email also sets out that the department would undertake a sweeping review of all debts where averaging was used.
"Customer compliance division will methodically work through previous debts identified as part of the online compliance program and respond to their requests for clarification," it said.
The department will also be writing to affected customers.
"For customers who are affected, the department will freeze debt recovery action as CCD identifies them and looks at each debt. The department will also write to affected customers to let them know," the email said.
7.30 has contacted the Minister for Government Services and the Department of Human Services for a response.
The Australian Minister for Government Services Stuart Robert was very careful in his wording of the change in approach to 'debt' collection as was wording on the Department of Human Services website.
It appears that little is altered with regard to robotdebt unless individual welfare recipients fall into the category of a) never having engaged with DHS/Centrelink after having received an initial notice informing them of an "income discrepancy"; b) also ignored any followup letters/emails
/texts/phone calls and c) whose alleged debt did not occur in a time period for which Centrelink still retains all documents concerning cash transfers made to the individual recipient.
It is only this category of welfare recipients who has never offered verbal or written information concerning the alleged debt, therefore they are the only persons who by Mr. Robert's reckoning may have had their alleged debt solely calculated by flawed data matching with the Australian Taxation Office.
The number of people who remain in this category after DHS/Centrelink's debt recovery program has been running for more than three years is not known - it could be as little as est. 6,500 or as many as est. 600,000 individuals.
Make no mistake, the Morrison Government will not easily abandon this lucrative stitch up of the poor and vulnerable.
In the 2018-19 financial year alone the total debt from income compliance activity was valued at $885.8 million and the value since the program began now totals $1.86 billion.
BACKGROUND
The Monthly, 19 November 2019:
Asher Wolf, one of the original grassroots campaigners against the robodebt program, says the government’s move is tactical. “Don’t trust DHS to act in good faith not to ramp up robodebt again. If you back off from challenging the government – for even a minute – on mendacious data-matching schemes, they’ll slide right back into old patterns of cruelty.”
Today’s move could even endanger the government’s projected return to surplus, which relies on some $2.1 billion in prospective debt recoveries under the robodebt program over the 2019–20 to 2021–22 period. “The Coalition’s AAA credit rating is balanced off raising preposterous, erroneous, illegal debts,” says Wolf. “I have no doubt the Coalition will come after the same people they always attempt to hurt: the poor and the vulnerable.”
Gordon Legal, website, 19 November 2019:
You may be aware that the so-called Robodebt issue has been widely reported in the media and has been the subject of both a Parliamentary Inquiry and a report from the Commonwealth Ombudsman. Unfortunately, the Commonwealth Government does not appear to accept that the Debt Notices, issued by Centrelink on its behalf are invalid and that it has an obligation to repay the money it has already collected under the Robodebt Scheme.
Unless the Commonwealth agrees to change its position then our current view is that people with a claim of the kind broadly described above should pursue their rights by commencing a Group or Class Action.
A class action will be launched against the Government over the so-called robodebt scandal, arguing the Government's automated debt system is unlawful.
Key points:
- Lawyers will argue the Government could not rely on the robodebt algorithm to collect money
- The action will seek both repayment of falsely claimed debts and compensation for affected people, lawyers say
- The Opposition says the robodebt billing practices are "verging on extortion"
Peter Gordon, a senior partner at the law firm, said the collection of money based solely on a computer algorithm was unlawful.
"The Commonwealth has used a single, inadequate piece of data — the robodebt algorithm — and used it to seize money and penalise hundreds of thousands of people," he said
Read the full article here.
Victoria Legal Aid, 8 September 2019:
The Federal Court has been told that Centrelink has wiped the debt at the centre of a second test case against its robo-debt scheme. The case will go to a hearing in early December.
Our client, Deanna Amato has been told her robo-debt of $2754 had been wiped, after a recalculation process found the true overpayment to be just $1.48.
‘I'm happy that I don't have a big debt looming over me anymore, but on the other hand, I'm stunned that it was recalculated so easily after I took legal action’, said Deanna.
‘Centrelink will make you jump through hoops to prove your innocence, but it turns out they were capable of finding out if my reporting was correct and that I didn't owe them anything like what the robo-debt claimed I owed. It makes me question the system even more’, she said.
The 33-year-old local government employee says Centrelink has refunded her over $1700, after they took her full tax return earlier this year. At the time, she had never spoken to anyone from Centrelink about the supposed debt.
‘It was scary when Centrelink took my tax return out of the blue. I had no idea what my rights were, or if Centrelink even had this kind of power over my money, so I turned to legal aid for advice.
‘Now that they have wiped the debts of both Victoria Legal Aid cases, it makes me wonder how many people have paid supposed debts that were completely inaccurate. I hate to think of more people suffering because of incorrect calculations.
People may be handing over money they don't even owe, because they're too afraid, or don't have the means, to challenge them. That's why I think the system needs to change’ said Deanna.
Rowan McRae, Executive Director of Civil Justice Access and Equity at Victoria Legal Aid said our legal challenges to the scheme continued – ‘We cannot accept a system that is so clearly flawed and causing overwhelming hardship to the most disadvantaged people in our community.’
‘We are contacted every day by people who are feeling overwhelmed by this system that puts the onus on them to disprove debts. It is important that a court looks at the lawfulness of the process Centrelink relies on to decide that people owe them money’. said Rowan.
Deanna says she is keen to have the court look at the decisions that led to the debt being raised. ‘It turns out, when I was receiving Centrelink assistance, I reported my income, yet they still were able to raise a debt of almost $3000 and take my tax return. The fact that Centrelink wiped my robo-debt, does not change my feelings about this court case going ahead. The robo-debt process needs to be seriously examined,’ she said.
‘If I hadn't taken this legal action, I don't think Centrelink would have ever realised the problem with my so called ‘debt’, Deanna said.
Deanna Amato’s case will go to a hearing in December with our first client Madeleine Masterton’s to be scheduled for hearing after that case is determined. [my yellow highlighting]
