Almost 400,000 Australians are set to get reimbursed by the Government, after shortcomings were found with its automatic debt collection system.
The Income Compliance Scheme – more commonly known as robotdebt – has over the years collected almost half a million debts by identifying mismatches in reported income between Centrelink and the Australian Tax Office.
But about 20 per cent or so of debt letters sent out – which were done automatically if Centrelink believed someone might owe more than $100 – were actually based on false information.
Government Services Minister Stuart Roberts confirmed Services Australia had identified 470,000 debts raised to some extent by the income averaging data.
It meant $721 million needed to be repaid to 373,000 Australians.
“We are doing that because the best advice we have is that raising debts based on average income is not sufficient under law, so we will return that money and move forward with our income compliance program with further proof points to ensure it remains sufficient,” Mr Roberts said.
“The Morrison Government takes its responsibility for upholding the integrity of Australia’s welfare system seriously.”
Labor’s class action against Government
Labor earlier this year launched a class action with Gordon Legal against the Government for wrongly collecting or trying to collect “debts” from some of Australia’s most vulnerable people.
The class action mediation was actually do tomorrow, with Shadow Government Services Minister and past Labor Leader Bill Shorten said Coalition Ministers obviously did not want to front the courts over the damage they had caused.
He yesterday made clear that despite the settlement, the class action would continue.
He said the class action would continue.
“Hundreds of people, after receiving the debt notices, passed away, and I have no doubt that some of that in some cases is due, tragically, to the mental health pressures of Robodebt action by the Government,” he said.
“The Government has for years been illegally taking people’s money. It’s been putting ordinary Australians through pain, trauma, people have lost jobs, people have lost relationships, people have suffered psychological injury, people were not allowed to go overseas, all on the basis of illegal Government debt notices.”
Mr Roberts did not say if the Government would pay the interest of debts, which was a key part of the class action.
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