Nearly 200,000 people identified by the unlawful robodebt scheme won’t be pursued, with the federal government scrapping long-running investigations and wiping debts from the “shameful” scheme.
On Wednesday, Social Services minister Amanda Rishworth confirmed about 124,000 people who had been told their social security payments were under review because of the automated data matching program will have their reviews cancelled.
Another 73,000 people had been identified by the scheme for potential debts but not informed. These potential debt notices will also not be pursued.
“We’re committed to a better Australia and that means delivering a social security system that is not punitive,” Ms Rishworth said.
Robodebt was launched in 2016 by the Coalition. The Online Compliance Intervention system used an algorithm to average out a welfare recipient’s yearly income using data from the tax office and cross-matched this with income reported to Centrelink.
If the system found a discrepancy, a “please explain” notice was sent to the individual automatically, with the onus placed on them to prove that the debt didn’t exist. If they didn’t do this, a debt notice was then issued.
The system was found to regularly incorrectly match data and issue inaccurate or false debts.
The Coalition backed away from the scheme in 2019 and announced plans the following year to refund debts raised through it.
A class action lawsuit against robodebt was settled by the Commonwealth in early 2021, with the government agreeing to refund $720 million in debts, to scrap a further $400 million in potential debts. The government would also have to provide $112 million in compensation.
But the former government continually blocked the release of crucial documents relating to the early development of the scheme and the legal advice that was provided to it regarding robodebt.
This led a Greens and Labor-led Senate Committee in May to call for a Royal Commission, and Labor committed to this in the same month.
The Albanese government launched a Royal Commission into the “cruel” scheme in August, with a final report expected by April.
“The robodebt fiasco is something that should be of deep concern to all Australians. It was meant to save money, however we know it had a significant human cost,” Ms Rishworth said.
“I’m pleased the Albanese Labor government can take further action to ensure 197,000 Australians have reviews wiped so they don’t have to be subject to that stress.”
The decision by the government means the secretary of the Department of Social Services now has no obligation to chase the potential debts, in what the government considers would not be a cost effective exercise that may damage public confidence in the social security system.
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