Victoria Legal Aid

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 commissionExternal Link 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.

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.

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Reviewed 14 November 2023

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