Robodebt scheme

The Robodebt scheme, often called simply Robodebt or Robo-debt, is the colloquial name for the Online Compliance Intervention (OCI), a method of automated debt recovery formerly employed by Services Australia as part of its Centrelink compliance program.[1][2][3] Put in place in July 2016 and announced to the public in December of the same year,[4][5] the scheme aimed to replace the formerly manual system of calculating overpayments and issuing debt notices to welfare recipients with an automated data-matching system that compared Centrelink records with averaged income data from the Australian Taxation Office.[3][4]

The scheme has been the subject of considerable controversy, having been criticized by media, academics, advocacy groups and politicians due to allegations of false or incorrectly calculated debt notices being issued, concerns over impacts on the physical and mental health of debt notice recipients and questions around the lawfulness of the scheme.[3][6][7] Robodebt has been the subject of an investigation by the Commonwealth Ombudsman,[8] two Senate committee inquiries [9][10][11] and several legal challenges.[12][13]

On 29 May 2020, the Morrison Government announced that it would scrap the debt recovery scheme, with 470,000 wrongly-issued debts to be repaid in full.[14] The total sum of the repayments is estimated to be A$721 million.[3]


Inception
Christian Porter Portrait, Minister for Social Services (September 2015 - December 2017)

Measures to create budgetary savings by pursuing outstanding debts and investigating cases of fraud in the Australian welfare system were first flagged by the Abbott Government in the 2015 Australian federal budget.[15] Following the 2015 Liberal Party Leadership Spill and 2016 Australian federal election, the Turnbull government implemented an overhaul of the federal welfare budget in an effort to crack down on Centrelink overpayments believed to have occurred between 2010 and 2013 under the Gillard government.[4][5]

Previously, Centrelink staff manually checked customer records against data provided by the Australian Taxation Office (ATO), generating debt notices at an estimated rate of about 20,000 a year.[4][5] In July 2016, the manual system was replaced with the Online Compliance Intervention, an automated data-matching technique with less human oversight, capable of identifying and issuing computer-generated debt notices to potential welfare recipients who had been overpaid.[3][4] Announced to the public in December 2016, by then-Minister for Social Services Christian Porter, this new automated debt recovery scheme - given the colloquial name 'robodebt' by the media[8][16] - was estimated to be capable of issuing debt notices at a rate of 20,000 a week.[4][17]

Debt recovery efforts

In early January 2017, six months after the commencement of automated debt recovery, it was announced that the scheme had issued 169,000 debt notices,[18] and recovered A$300 million.[19] Based on these figures, it was suggested that a similar automated debt recovery system would be applied to the Aged Pension and Disability Pension, in order to potentially recover a further A$1 billion.[16]

The 2018 Australian federal budget indicated that the Robodebt data matching scheme would be extended into 2021, with the aim of recovering an additional A$373 million from welfare recipients.[20]

Controversy and criticism

Opponents of the Robodebt automated process say that errors in the system have led to welfare recipients paying nonexistent debts or debts that are larger than what they actually owe, whilst some welfare recipients have been required to make payments while contesting their debts.[16] In some cases, the debts being pursued dated back further than the ATO requests that Australians retain their documentation.[17] Particular criticism has focused on the burden of proof being moved from Centrelink needing to verify the information, to being on the individual to prove they did not owe the funds, with human interaction being very limited in the dispatch of the debt letters.[3]

Politicians from the Australian Greens, Australian Labor Party, Pauline Hanson's One Nation and Independent Andrew Wilkie, have criticized the scheme and it's automated debt calculation methods.[11][16][21][22][18] The scheme has also been criticized by advocacy groups for people affected by poverty, disadvantage and inequality, including the Australian Council of Social Services and Saint Vincent de Paul Society.[4][17]

First Senate committee inquiry

The Robodebt scheme was the subject of a Senate committee inquiry in 2017.[9] The inquiry had a number of findings and made a number of recommendations,[23] including:

  • "That a lack of procedural fairness is evident in every stage of the program, which should be put on hold until all procedural fairness flaws are addressed".
  • "That the Robodebt scheme disempowered people, causing emotional trauma, stress and shame".
  • "That the Department of Human Services has a fundamental conflict of interest – the harder it is for people to navigate this system and prove their correct income data, the more money the department recoups".
  • "That the Department of Human Services should resume full responsibility for calculating verifiable debts (including manual checking) relating to income support overpayments, which are based on actual fortnightly earnings and not an assumed average; and provide those issued debt notices with the debt calculation data required to be assured any debts are correct".

Second Senate committee inquiry

The scheme was again the subject of a Senate committee inquiry, begun in 2019.[10][11] Initially meant to report its findings in December 2019, this deadline has been extended twice, with the Senate committee due to deliver its report on 19 August 2020.[10]

In February 2019, Legal Aid Victoria announced a federal court challenge of the scheme's calculations used to estimate debt, stating that the calculations assumed that people are working regular, full-time hours when calculating income.[12] In November 2019, the federal government agreed to orders by the Federal Court of Australia in Amato v the Commonwealth that the averaging process using ATO income data to calculate debts was unlawful, and announced that it would no longer raise debts without first gathering evidence – such as payslips – to prove a person had underreported their earnings to Centrelink.[14][24]

In September 2019 Gordon Legal announced their intention of filing a class action suit challenging the legal foundations of the 'robo-debt' system.[13][25]

Demise

On 29 May 2020, Stuart Robert, Minister for Government Services announced that the 'robo-debt' debt recovery scheme was to be scrapped by the Government, with 470,000 wrongly-issued debts to be repaid in full. The total sum of the repayments is estimated to be A$721 million.[3] Opposition Government Services spokesperson Bill Shorten criticised the Government's lack of apology for the scheme, citing the psychological harm to many of those issued with debt recovery notices.[21]

On 31 May 2020, Attorney-General Christian Porter, who was Minister for Social Services when Robodebt was first implemented, and who had previously defended the scheme,[19] conceded that the use of averaged income data to calculate welfare overpayments was unlawful, stating that there was "no lawful basis for it".[7][26]

References
  1. "Chapter 1: Introduction and background". Parliament of Australia. Retrieved 30 May 2020.
  2. "Compliance program". Services Australia. Retrieved 30 May 2020.
  3. Hayne, Jordan; Doran, Matthew (29 May 2020). "Government to pay back $721m as it scraps Robodebt for Centrelink welfare recipients". Australian Broadcasting Corporation. Retrieved 29 May 2020.
  4. Martin, Sarah (5 December 2016). "Welfare debt squad hunts for $4bn". The Australian. Retrieved 30 May 2020.
  5. Purtill, James (16 December 2016). "Students accused of welfare fraud say Centrelink's sums are wrong". triple j Hack. Retrieved 30 May 2020.
  6. "Government must cancel robodebts and boost Centrelink staffing". Australian Council of Social Service. Retrieved 30 May 2020.
  7. Henriques-Gomes, Luke (31 May 2020). "All Centrelink debts raised using income averaging unlawful, Christian Porter concedes". The Guardian. Retrieved 31 May 2020.
  8. "Lessons learnt about digital transformation and public administration: Centrelink's online compliance intervention" (PDF). Commonwealth Ombudsman. Retrieved 30 May 2020.
  9. "Centrelink debt recovery program to face Senate committee grilling". ABC News. 8 March 2017. Retrieved 21 May 2017.
  10. "Centrelink's compliance program". Parliament of Australia. Retrieved 30 May 2020.
  11. "Senate sends robodebt to inquiry for the second time in three years". Australian Greens. 19 August 2019. Retrieved 30 May 2020.
  12. Murphy, Katharine (17 September 2019). "Robodebt class action: Shorten unveils 'David and Goliath' legal battle into Centrelink scheme". The Guardian. ISSN 0261-3077. Retrieved 22 October 2019.
  13. Henriques-Gomes, Luke (29 May 2020). "Robodebt: government to refund 470,000 unlawful Centrelink debts worth $721m". The Guardian. Retrieved 30 May 2020.
  14. Annabel Crabb (13 May 2015). "Budget 2015: Welfare cut by $1.6 billion over four years". ABC News. Retrieved 13 May 2015.
  15. Belot, Henry (17 January 2017). "Centrelink's controversial data matching program to target pensioners and disabled, Labor calls for suspension". ABC News. Retrieved 19 January 2017.
  16. Belot, Henry (12 January 2017). "Centrelink debt recovery: Government knew of potential problems with automated program". ABC News. Retrieved 18 January 2017.
  17. Anderson, Stephanie (5 January 2017). "Centrelink debt recovery system failures have 'frightened' recipients, Andrew Wilkie says". ABC News. Retrieved 18 January 2017.
  18. Anderson, Stephanie (3 January 2017). "Centrelink: Social Services Minister Christian Porter defends debt recovery system". ABC News. Retrieved 30 May 2020.
  19. "Find out if you're a winner or a loser in this year's budget". ABC News. 8 May 2018. Retrieved 8 May 2018.
  20. "Bill Shorten says 'Robodebt' scheme was illegal". Australian Broadcasting Corporation. 29 May 2020. Retrieved 29 May 2020.
  21. Hunter, Fergus (18 January 2017). "One Nation brands Centrelink robo-debt recovery 'malicious' and 'criminal'". The Sydney Morning Herald. Retrieved 30 May 2020.
  22. "Chapter 6: Conclusions and recommendations". Parliament of Australia. Retrieved 30 May 2020.
  23. "Robo-debts". Victoria Legal Aid. Retrieved 30 May 2020.
  24. "Robodebt Frequently Asked Questions". Gordon Legal. Retrieved 30 May 2020.
  25. "Government concedes flaws but refuses to apologise for its unlawful Robodebt program". Australian Broadcasting Corporation. 31 May 2020. Retrieved 31 May 2020.
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