Robo-debt Faces Up to Landmark Court Case

The social sector has thrown its support behind Victoria Legal Aid’s “landmark” challenge of the controversial automated debt recovery system, known as robo-debt.

Victoria Legal Aid (VLA) filed papers in the federal court on Tuesday, challenging Centrelink’s means of assessing if a person was in debt – via an algorithm averaging a person’s yearly income from the tax office – and automatically issuing a debt notice if it didn’t match fortnightly income reporting to Centrelink.

It will challenge that a debt to Centrelink could not be imposed on a person based on the fact the current numbers and processes are unlawful.

Rowan McRae, VLA executive director of civil justice, said the case was not about helping people avoid debt, but to pave the way for a fairer, smarter, accurate system that worked for government and the people accessing it.

“The way robo-debt averages people’s income assumes that they work neat, regular hours throughout a year. In reality, we know people work part time or sporadically throughout the year, because they’re studying, can’t get regular work, have multiple jobs or are unwell. This means the calculation of alleged ‘overpayments’ is often inaccurate,” McRae said.

“Centrelink should create a system that encourages accurate reporting and fairly investigates overpayments. What we can’t accept is a system that is so clearly not working, that has been proven to be causing overwhelming hardship.”

The Australian Council of Social Services (ACOSS) welcomed the announcement, with the organisation’s CEO, Cassandra Goldie describing the system as a “devastating abuse” of government power.

“Robo-debt has unleashed thousands of debt notices in error to parents, people with disabilities, carers, students and people seeking paid work, resulting in people slapped with Centrelink debts they do not owe or debts higher than what they owe,” Goldie said.

The latest case is centred around Madeleine Masterson, a 31-year-old registered nurse, who was notified in 2018 of an $4,000 alleged debt from 2011 when she was receiving Youth Allowance payments.   

Masterson said she was surprised by the lack of transparency from Centrelink on how her debt was calculated. Represented by VLA, she hoped the case would help others less fortunate.

“I feel a social responsibility to push forward, especially if that means that people who are less equipped or less able, do not have to deal with this as well,” Masterson said.

Goldie said it was disappointing it was being left to an individual and her lawyers to litigate in the courts over the matter.“ACOSS congratulates them for their courage and determination in taking up this legal challenge,” she said.

Kasey Chambers, executive director of Anglicare Australia, told Pro Bono News she hoped the new voice in the argument against robo-debt would finally shut the program down.

“This is an unexpected voice in the case, showing it’s not just the usual suspects anymore who are speaking against this,” Chambers said.  

“We certainly hope whichever colour of government we end up with is looking carefully at this, because we really need to get rid of a system harming people who are coming into contact with it.”

McRae said while government should embrace technology, they needed to do it in a smarter way.

“We hope the court will ultimately find that robo-debt is unlawful and that a system with integrity will follow,” she said.

Chambers added that while there were times when automation worked well, using it for welfare services like Centrelink was not appropriate, and was putting more stress on the services Anglicare were meant to provide.  

“Rather than talking about housing or relationships we’re having to sit with [people] and work through a telephone call with Centrelink. It’s quite inefficient,” she said.

The Australian Greens also threw their support behind the court challenge and called for the suspension of the program during the court case.

Greens Senator Rachel Siewert said she had heard “devastating” evidence in her two years chairing the senate inquiry into robo-debt.

“The human consequences of robo-debt are gobsmacking in the brazen way the government threw out fairness to pick on some of the most vulnerable people in Australia,” Siewert said.

“We should not be subjecting people on income support to a system which has such a huge rate of error.

“It just wouldn’t fly in any other industry but the government thinks they can get away with it because in many cases people on income support just don’t have the means to question their debt notices.”  

Chambers encouraged the sector to continue the fight against punitive programs in the lead up to the federal election, and to continue to provide support for vulnerable people to the best of their ability.   

“I think the sector can do what it normally does very well which is to work with people and talk to people about these issues ahead of an election,” she said.