Robo-debts

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Robo-debts

This page can help you understand Centrelink's 'robo-debt' system and explains what options you have if you have been contacted by Centrelink or have a debt relating to employment income.

Not all Centrelink debts are ‘robo-debts’, but it is believed many raised from mid 2016 onwards are. Centrelink should be able to tell you if your debt was calculated using unlawful ATO income averaging or you may also determine this by making a freedom of information (FOI) request.

Refunds – the Australian Government has conceded the robo-debt scheme used an unlawful method (income-averaging) to raise debts. It will refund at least 470,000 unlawful debts, starting from 1 July 2020. 

Class action – there is a class-action case that aims to compensate people affected by robo-debts. Centrelink has sent formal notices to all eligible people about a class action run by private law firm Gordon Legal. Read about your options if you have received an opt-out notice, or think you should have received an opt-out notice.

On this page

 How will I get my money back?

From 1 July 2020, the Australian Government will give refunds to people who have paid unlawful robo-debts. The government says it will contact and automatically refund eligible people. Make sure your contact details are up to date with Centrelink, or change them in your MyGov account

How did the 'robo-debt' automated system work​?

In 2016, Centrelink introduced a new automated system to try to detect overpayments to past and present recipients of social security payments. The system used income information held by government agencies, usually the Australian Tax Office (ATO), and compared it to the income a person reported. If the system thought there was a difference, Centrelink sent you a letter advising of a potential debt and asked you to provide further information about your income such as payslips.

If you didn’t respond, Centrelink used the information about your income from the ATO and averaged it over multiple fortnights to determine a debt. Centrelink required people to repay this debt if you did not provide the additional information it had asked for. If you did provide additional information, Centrelink took that into account when calculating a potential debt.  

The robo-debt system was a change from how Centrelink used to determine debts. Previously, if you could not provide the additional information Centrelink requested, Centrelink would write directly to your employer or bank to get this information before deciding if you had been overpaid and if so, how much.  

How did the Amato case change robo-debt?

In a case Victoria Legal Aid brought on behalf of our client Deanna Amato, the Australian Government conceded that income averaging of ATO data was not a lawful way to accurately calculate a debt. Debts raised by this type of income averaging are unlawful robo-debts. Read about Deanna Amato’s case. Centrelink has confirmed that it will no longer raise debts that rely only on averaging of ATO data. In some instances, Centrelink may still be asking people to provide payslips or bank statements before allowing a review of the debt decision to proceed, even though they have accepted that the initial debt was unlawful. If you have been asked to provide this information, go to Centrelink has asked me to confirm or update my employment information – do I need to respond

Do I have an unlawful robo-debt?

Not all Centrelink debts are unlawful robo-debts. A debt is an unlawful robo-debt if Centrelink used averaged Australian Tax Office data to calculate a debt, or part of a debt. Knowing whether this occurred can be difficult.

A robo-debt will usually have arisen if you were:

  • told there had been a data match with the Australian Tax Office in relation to your income; and 
  • asked to provide payslips or bank statements; and 
  • did not provide that information (or all of the information requested). 

Centrelink has now identified all debts raised under this system. Centrelink should be able to tell you if your debt was calculated using ATO income averaging. You may also be able to determine this by making a freedom of information (FOI) request.

Unless you receive a formal notice requiring you to do so under a specific section of the Social Security Law, you do not have any legal obligation to provide information about your income for past periods or additional documentation such as bank statements or payslips. This includes where a debt has already been raised. You have no obligation to provide extra information in order to receive a review of a debt. If Centrelink does not have a lawful basis to recover a debt, it should set the debt aside. See Centrelink has asked me to give them payslips, bank statements or other information – do I need to respond?

How to make a freedom of information request

You have the right to view or get copies of your personal information that Centrelink keeps on file, including information about your debt. A request for access to documents should be made in writing and can be sent via email to FOI.Legal.Team@Humanservices.gov.au It does cost money to request this.  

Centrelink has asked me to give them payslips, bank statements or other information – do I need to respond?

We understand Centrelink will no longer ask people to provide payslips or bank statements to disprove the existence of a debt. It has legal powers to get income information directly from your employer to work out whether you have a debt 

Unless you receive a formal notice requiring you to do so under Social Security Law, you do not have any legal obligation to provide information about your income for past periods, or other documents such as bank statements or payslips. This includes where a debt has already been raised. You have no obligation to provide extra information to receive a review of a debt. If Centrelink does not have a lawful basis to recover a debt, it should set the debt aside. 

If you provide supporting documents such as payslips that confirm your income for the relevant fortnightly period, Centrelink will use them to find out if there is an overpayment, and the correct amount of any overpayment. Centrelink can also contact your employer or financial institution to obtain documents to calculate whether you have a debt. 

We have concerns about the use of bank statements to calculate debts. If you believe these have been used to determine your debt, please contact us.  

Robo-debt class action and opt-out notice

Read about class actions and your options if you have received an ‘opt-out notice’ from Centrelink about the robo-debt class action being brought by private law firm Gordon Legal. Victoria Legal Aid is not involved in the robo-debt class action.

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