Disclaimer: The material in this print-out relates to the law as it applies in the state of Victoria. It is intended as a general guide only. Readers should not act on the basis of any material in this print-out without getting legal advice about their own particular situations. Victoria Legal Aid disclaims any liability howsoever caused to any person in respect of any action taken in reliance on the contents of the publication.

We help Victorians with their legal problems and represent those who need it most. Find legal answers, chat with us online, or call us. You can speak to us in English or ask for an interpreter. You can also find more legal information at www.legalaid.vic.gov.au

Learning from robo-debt – building a social safety net people can trust

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

On this page

‘It felt like no one in government wanted to help me and instead I had to fight them in circumstances where I had no power, no control and no ability to fight back. You don’t carry around all your paperwork when you are homeless. Taking money out of my payment was the last straw. I felt like I had no options and thought I wasn’t going to live much longer.’ – Isabella

Isabella was one of thousands of Australians caught up in robo-debt.

From 2016 to 2019, robo-debt 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 Isabella which they then had to prove they didn’t owe.

Hunting down old payslips was time-consuming and stressful, and clients told us of feeling exploited and anxious when Centrelink sent debt collectors or garnished their payments without their knowledge.

Beyond the burden of repaying debts, robo-debt caused an incalculable amount of stress and hardship on thousands of Australians, created by the government system meant to support and protect them.

It is essential that the mistakes of this failed scheme are never repeated.

Latest news

We've joined the call for immediate action to end Centrelink's robo-debt system

We are signatory to the recent ACOSS statement. We call for the Minister for Human Services Alan Tudge to respond to concerns about privacy.

Robo-debt should be replaced with an accurate system people can trust

We gave evidence with two clients to a Senate committee looking into Centrelink's robo-debt system.

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

The human toll of robo-debt highlights the impact of inadequate government policy design and implementation.

With millions of Australians receiving social security each year, there are several improvements we see as necessary to ensure the system works for people, not against them.

Keeping government services accountable

Improved safeguards, transparency and oversight will help ensure that policy design and implementation is kept in check, and that feedback from service users and other parties is heeded.

Putting people first

A better system will embed a client-first approach, prioritising the client experience and ensuring that any new schemes or policies are co-designed with those meant to benefit from it.

Empowering their voices

Improving the current dispute resolution and complaint mechanisms will allow service users to exercise their rights more effectively when it comes to reviews, appeals and complaints.

Extra support when needed

People need to be aware of their rights when interacting with the system and should have greater access to legal and non-legal services, including financial counsellors and community legal centres.

Technical changes

  • 10 per cent penalty or recovery fee to only apply in exceptional circumstances
  • No garnishing unless a person fails to agree to a reasonable payment plan after engaging with Services Australia
  • Rights for service users to obtain information about Centrelink decisions
  • No requirement for additional information if seeking a formal review

A robo-debt timeline

  • Late 2016

    Robo-debt is introduced, using income averaging from Australian Taxation Office (ATO) data to raise debts and implementing a reverse onus on recipients to disprove the amounts owed.

  • April 2017

    Senate Community Affairs References Committee hands down its first report, concluding significant lack of procedural fairness and questions of legality.

  • February 2019

    Represented by Victoria Legal Aid, Madeleine Masterton challenges her robo-debt in the Federal Court.

  • April 2019

    Commonwealth Ombudsman delivers implementation report and makes four further recommendations to improve the robo-debt scheme.

  • July 2019

    Senate refers robo-debt 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 robo-debt. 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.

  • August 2022

    A royal commission is announced, with public hearings beginning from October. It is due to deliver its final report in April 2023.

More information

Read about our advocacy priorities

Stay up to date with our fortnightly newsletter Legal Aid Brief

Law reform

Updated

Back to top