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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