Centrelink’s controversial ‘robodebt’ scheme has come under fire with a class action to be launched against the government over Robodebt due to the claim that it is unlawful.
Former Labor leader, Bill Shorten, backed the action. The senior partner of Gordon Legal, bringing the claim, stated that collecting money based exclusively on an algorithm was unlawful due to its penal consequences. They claimed that the mechanism was too simplistic and did not apply to the reality of people’s varying situations appropriately and rather, should be considered on a case-by-case basis. The partner further alleged that investigations have established an approximate sum of two to three hundred million dollars being wrongfully claimed from people and some of these have also had to pay 10 per cent penalties on these amounts, once the debt is sold to a private collector.
Other critics have raised issue with the legality of this scheme as it reverses the onus of proof such that the welfare recipients need to prove that they do not owe money rather than the Government proving that they owe money.
However, this has been disputed by the Government Services Minister, Stuart Robert, who views the suit as a political move and insists that the system is working. Despite 20 per cent of letters sent out demanding debts that were not owed, he claimed that the system was still working as the letters are merely a result of a discrepancy between their reported income at Centrelink and what they report for their tax return to the Australian Tax Office (ATO) and that the letters merely required the discrepancy to be explained.
Apart from this suggested class action, Victoria Legal Aid also brought an action on behalf of government employee Deanna Amato. Centrelink had claimed that she owed a debt of $2,754.00 that was paid to her while studying a diploma and also took all of her tax return without knowing or proving that a debt existed due to the reversal of the onus of proof. There is also another case for Madeline Masterson to decide if the Federal Court should test the legality of Robodebt due to Centrelink’s decision to clear her debt after Victoria Legal Aid filed her case earlier this year.
We hope that these hearings and the formation of the class action will alter the process to make Robodebt more legally compliant and to clarify the debt-collection process for the general public.
If you would like to enquire about any of the issues raised above, please do not hesitate to contact Freedman and Gopalan by calling 8917 8700 or by filling out the enquiry box.