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Learning from the failures of Robodebt – building a fairer, client-centred social security system

With every second household accessing government payments, we need a fairer social security system that treats people with respect and dignity.

‘To this day, I still get anxiety when I think about my robodebt. The government should care about people who are struggling; people who have depression or money troubles. They should not put pressure on them and make their lives worse.’ – Angelica (not their real name)

Angelica was one of thousands of Australians who were told they had a robodebt.

From 2016 to 2019, the Robodebt scheme raised more than half a million inaccurate Centrelink debts through a method of ‘income averaging’, which has since been ruled unlawful.

Debts were imposed on people like Angelica which they then had to prove they didn’t owe.

Hunting down old payslips and bank statements was time-consuming and stressful, and clients told us of feeling confused and anxious while trying to navigate an unclear system, or when Centrelink sent debt collectors or garnished their payments without their knowledge.

Beyond the burden of repaying debts, the scheme caused an incalculable amount of stress and hardship for thousands of Australians, created by a government system meant to support and protect them.

We successfully challenged the lawfulness of Robodebt in the Federal Court in 2019, contributing to the broader campaign that ultimately led to the dismantling of the scheme.

A royal commission examining Robodebt's impact on thousands of Australians made 57 recommendations for reform to ensure the scheme's mistakes are never repeated.

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Social welfare that works

‘My hope for the future is that Centrelink listens to people when they say something is incorrect and do not abuse their power. I was in a privileged position when my debt was raised. I was employed. There were lots of people still receiving Centrelink who were powerless to do anything about it. As a society we are meant to live with an ethic of care for each other.’ – Brooke (not their real name)

Each year, millions of Australians depend on social security payments, often in times of crisis.

Robodebt showed us how much damage inadequate government policy design and implementation can cause, how far it can reach, and the compounding harm created for people already under stress.

In our submission to the royal commission, we outlined four key areas of reform to build a better social security system, informed by our service response and broader practice experience, our client experience and test case litigation, as well as our work with advocates and sector partners.

Embedding co-design into redesign

Our social security debt determination and recovery system – along with any new policies – must be reviewed and redesigned in partnership with those meant to benefit from it, so that services are trauma-informed, accessible, inclusive, culturally safe and underpinned by the principle of self-determination for First Nations customers.

Knowing their rights

We must have improved dispute resolution and complaint processes so that people understand the decisions being made and have greater awareness of their rights, with Services Australia referring them to adequately resourced legal and non-legal services as necessary, including to financial counsellors, community legal centres and legal aid commissions.

A system that works

For a system to work fairly, it must be accurate and adequately resourced with properly trained staff and high-quality services that are responsive to an individual’s needs. The punitive nature of debt collection must cease, it should not be outsourced and greater protections granted to those with debts. Penalty fees and garnishing of tax refunds should only be imposed in limited circumstances.

Owning mistakes and acting on failures

Improved safeguards, transparency and oversight must keep the social security system in check and include human-led oversight mechanisms for any automated decision-making processes, appropriate consideration of decisions made by the Administrative Appeals Tribunal and its successor and greater powers and resourcing for oversight bodies, like the Commonwealth Ombudsman.

A Robodebt timeline

  • Late 2016

    Robodebt is introduced, using income averaging from ATO data to raise debts and implementing a reverse onus on recipients to disprove the amounts owed. 

  • April 2017

    Commonwealth Ombudsman makes recommendations to improve the scheme, amid growing public criticism. 

  • June 2017

    Senate Community Affairs References Committee hands down its first report, concluding significant lack of procedural fairness, questions of legality and recommending Robodebt be put on hold.

  • February 2019

    Represented by Victoria Legal Aid, Madeleine Masterton challenges her robodebt in the Federal Court. 

  • April 2019

    Commonwealth Ombudsman delivers implementation report and makes four further recommendations to improve the Robodebt scheme. 

  • July 2019

    Senate refers Robodebt to the Community Affairs References Committee for the second time. 

  • November 2019

    Victoria Legal Aid files proceedings in the Federal Court on behalf of Deanna Amato. A week later, the Department of Human Services (now Services Australia) ceases Robodebt.  

    The Amato case establishes for the first time that Robodebt is unlawful. 

    Private law firm Gordon Legal leads a class action. 

  • November 2020

    The class action is settled, with the Australian Government repaying more than $751 million in unlawfully claimed debts and $112 million in compensation to approximately 400,000 people. 

  • May 2022

    Senate Community Affairs Reference Committee hands down its second report, calling for a royal commission into the scheme. 

  • October 2022

    The Royal Commission into the Robodebt Scheme begins, with our client Madeleine Masterton and lawyer Miles Browne among the first witnesses to give evidence.

  • July 2023

    Commissioner Catherine Holmes delivers her 662-page final report, making 57 recommendations. A sealed chapter refers individuals for 'civil action or criminal prosecution'.

  • November 2023

    The federal government announces its response to the commission's report, agreeing in full or in principle to all formal recommendations.