Calls for robo-debt royal commission as class action is settled

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The federal government has agreed to pay $112 million in compensation, including legal costs, to approximately 400,000 eligible individual group members in a robo-debt class action settled in the Federal Court on Monday.

The settlement agreement brings the total remuneration from the failed debt-collection scheme to $1.2 billion and has sparked calls for a royal commission into the fiasco.

Labor’s government services spokesman Bill Shorten told the ABC that Labor would continue to push for a royal commission into robo-debt.

“It means that 400,000 victims of the government’s illegal protection racket … these people have got some justice,” Mr Shorten said.

“This is a good day for them, but I think the rest of Australia, and the people who were damaged by this process can say: ‘Who was responsible’?”

Green social services spokeswoman Rachel Siewert supported the calls for a royal commission into the scheme.

“I am very pleased for the victims of robo-debt,” Ms Siewert said. “This is yet another indictment on the abominable actions of the government who went after the most vulnerable in our community to make savings.

“People in our community shouldn’t have had to go through a class action in order to get action from the government. It will be almost impossible to account for the social and economic costs of the government’s punitive robo-debt program. 

“This program has literally cost people’s lives, ruined many, many more and caused so much pain and anguish. We still don’t know what the government knew and when, and they are still desperate to cover it up. Now the community needs to know how this all happened. 

“The government has clearly demonstrated they are not willing to hand over the legal advice they have relating to robo-debt and have hidden behind ‘public interest immunity claims’. 

“We need a royal commission because it’s very clear that the government is going to continue to keep trying to hide what has happened. A royal commission is the only way to get to the bottom of how this happened and make sure it doesn’t happen again.”

Australian Council of Social Service (ACOSS) chief executive Dr Cassandra Goldie said the scheme was an abuse of power that needed further investigation to ensure it was not repeated.

“We now need an independent, arm’s-length inquiry to establish accountability for this extraordinary abuse of government power inflicted upon hundreds of thousands of people around Australia,” Dr Goldie said.

“Robo-debt caused untold stress and trauma for people and their families. We all need an assurance that a terrible scheme like robo-debt can never be repeated. We also need people responsible to be held to account in an open and transparent manner.

“People who were pursued for money under robo-debt must also receive an undertaking that they will not again be pursued for alleged money owed. They have been through enough for the government to again chase them for alleged debts from up to 11 years ago,” Dr Goldie said. 

As well as the $112 million in compensation agreed to on Monday, the government is repaying more than $720 million in debts collected incorrectly and has agreed to drop claims for approximately $398 million in debts it had invalidly asserted.

Robo-debt was a system where Centrelink used a computer to try and calculate welfare overpayments to establish that a debt was owed.

The system used data from the Australian Taxation Office (ATO) and averaged income data across either part or all of the fortnights in which recipients received payments. It treated those averaged amounts as actual earnings and often ignored what the recipient actually earned at the time, causing many false debts to be raised.

Professor Peter Whiteford from the Australian National University wrote in The Conversation that the robo-debt fiasco “was clearly foreseeable”.

“The income reported to the ATO is what people receive in the financial year from July 1 to June 30,” Prof. Whiteford explained.

“Social Security payments are made fortnightly and the level of entitlement is based on the financial and personal circumstances that apply during that reporting period.”

Were you part of the class action against the government’s robo-debt scheme? Were you happy with the settlement? Do you think there should be a royal commission into the scheme? Should the ministers responsible for the scheme be sacked?

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Written by Ben


Total Comments: 24
  1. 0

    This is scandalous and unjust, those responsible should be held to account, however It seems the government settled to avoid ministers having to front the courts.
    As usual Scotty from Marketing moves on.

    • 0

      Agree Auldtic. I just believe the complete lack of concern and outrage by our media outlets regarding the illegal ROBODEBT which was instigated by our politicians, especially the LNP since the 2013 federal election, but more recently by none other than PM Morrison himself.
      He is the proverbial charlatan. He and his govt knew from the outset that ROBODEBT was illegal, yet they pushed on with it knowing it would create suffering and hardship beyond measure for the victims of it.
      Why isn’t there public outrage about this, so that the Pm is forced to resign along with rest of his LNP govt.
      The media can give this issue saturation exposure, but they not doing that. WHY????

  2. 0

    Anyone with any common sense should have known that averaging income over the year does not equate with the way in which Centrelink calculates your fortnightly entitlements. I wrote to my local LNP member at the start of this fiasco and pointed this out. Guess what? He had no commonsense either! There is nothing wrong with initially checking through annual income averaging against a person’s tax return PROVIDED any apparent anomoly is then manually checked by an assessor to verify if a real discrepancy exists. This is the step that previous govts used before a debt notice was issued, and the vital step that the current LNP govt refused to take. Extortion was their game and they have now been royally caught out – we have not heard the end of this and I am sure that other court cases will follow to bring justice to all who had money extorted by our corrupt uncaring LNP govt.

    • 0

      Absolutely Buggsie, but apparently it’s all OK to use the tax returns to prove that there is a gender pay gap. The unions and some from the hard left are using annual returns to show that women earn less than men when the truth is that men work more hours than women, on average, and the more you work, the more you get paid. Apologies for ranting off topic.

    • 0

      Agreed Horace Cope, as long as men and women are paid the same rate/hour for the same work I’m good with the system.

  3. 0

    “Were you part of the class action against the government’s robo-debt scheme? Were you happy with the settlement? Do you think there should be a royal commission into the scheme? Should the ministers responsible for the scheme be sacked?”

    No, we weren’t part of the class action. Not as happy as the solicitors who will cop a motza out of the money to be paid to the litigants. A Royal Commission will cost a lot of money but what will it disclose that we don’t already know? Legal advice was given that RoboDebt was legal but subsequent legal advice then contradicted the first ruling and RoboDebt was stopped that day. Over $720M has already been paid back and there are at least 3 ministers who were in charge during the period involved.

    It has always been a game in the parliament to try and force the government to sack a minister and this is no different. Both sides do it, sometimes successfully but most times not. I ignore any call by the Greens for a Royal Commission as they will call for one at the slightest little event that upsets them. Even if a Royal Commission was called, it’s the government that sets the parameters for the Royal Commissioner to investigate.

    • 0

      My understanding, correct me if I misunderstood, is that the those who paid their alleged Robo-debt will have it refunded, others under claim will have the claims withdrawn and on top will be compensated approx $250 each.
      The question is if there are people affected by the government unlawful act, will they also be compensated if they were not part of the class action or do they have to lodge a complaint to the court objecting the fact that the settlement was unfair because it left them out?

    • 0

      If one needs to object they need to do it now before the court approves the settlement.

  4. 0

    This whole robo debit was just a disgrace as are all the Ministers involved…not having to front up and be questioned about this scandal because it was settled out of court is a joke and listening to ministers saying the Federal is not responsible for it is just total arrogance.

  5. 0

    So have I got this right?
    The Feral Government has agreed to settled this claim including compensation before the case is held in court so the Politicians & Bureaucrats responsible don’t have to face JUSTICE.
    Thank God its THEIR MONEY

  6. 0

    Robo-debt was declared UNLAWFUL but the action to recover “alleged debts without evidence’ by coercion, intimidation, standover tactics, was ‘CRIMINAL’. Yet, the criminals are still at large. Bring on the Royal Commission.,a%20Judicial%20Inquiry,of%20inquiry%20or%20task%20force

  7. 0

    Its time for public shaming – who & why? The time for honourable seppuku has ended.

  8. 0

    I read really terrible stories during the years that the Robodebt was going. People having $$ taken out of their tax return, not even realising that they had a debt. debt collectors verbally harrasing people. There were people who committed suicide over the debts. The stories I read on the Robot debt website that had been set up by a “bored” stay at home mother were just terrible. She had no idea what she had started when she first decided to set up the website for people to tell their stories. Not sure that money can compensate for the pain that many people went through fighting Centrelink. I do no know that the first and the 2nd ministers at the time were really really terrible. They are still ministers but somewhere else. They shouldn’t be in parliament.

  9. 0

    The intention of the system was to claim back overpaid money.
    Someone came up with an automated system to calculate overpaid money and claim it back.
    The system was flawed and mistakes were made.
    I hope part of the Royal Commision would be how to do it correctly.
    I hope they could come up with a good system to claim back every dollar of overpaid welfare money.
    Then the Royal Commission may be worthwhile.

  10. 0

    Perhaps a royal commission into the whole Federal Liberal party may be the way to go they just go from one disaster to another the longer they are in power the worse they get.

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