The Department of Human Services will no longer raise welfare debts based only on the unproven assumption that a person earned an income from employment at an even rate over the course of a certain year, and that person’s inability to prove otherwise.
The change removes a key bone of contention from the highly controversial welfare compliance campaign known as robodebt, and has led to a flood of triumphant celebration from its many critics. On its own, income averaging can create phantom over-payments in cases where people were perfectly entitled to a welfare payment for part of a financial year, but also earned a significant amount of income at other times in the year.
Previously people were asked to provide more details of their past fortnightly or monthly earnings to prove they were not overpaid, and those who could not do so were saddled with debts.
Now, the department will never raise a debt when all it has to go on is the person’s income, averaged across a financial year and cross-referenced with its welfare records. It will still use income averaging, but will need unspecified additional evidence to raise a debt, and it will be up to DHS staff to find it.
The department will also review all previous debts that relied solely on income averaging, and freeze debt recovery action in relevant cases.
ABC current affairs reporter Paul Farrell broke the story on Tuesday based on an internal email sent around DHS by the general manager of Debt and Appeals (currently Anthony Seebach).
Some have challenged robodebt in court; various lawyers have essentially argued the government has unjustly reversed the onus of proof by demanding payment of a debt based on an assumption, unless that assumption can be disproven by the debtor. The department has staved off these persistent legal threats by settling several cases out of court, but a class action was launched in September with the support of the opposition.
The new change is widely seen as a move to avoid having robodebt shot down by an adverse court ruling. The class action’s proponent admitted it would have to “break new ground” to succeed but the cost to the taxpayer of settling it would be much higher than in individual cases.
Minister for Human Services Stuart Robert said the change was only a “further refinement” of the program and had a message for anyone who had previously received a debt based solely on income averaging: don’t call us, we’ll call you.
“We’ll continue to use income averaging, with other proof points, as the basis to identify the possibility of a debt,” he confirmed in a press conference. “The key refinement is that income averaging, plus proof points, will be used to crystallise or finalise the debt.”
Robert defended the previous robodebt process as “reasonable” only last week at the National Press Club, but avoided the question he was asked: why the department had never tried to defend it in court.
The Community and Public Sector Union supports the change as its members in DHS have long-held concerns about the fairness of the program. It also took the chance to lobby for more permanent public servants to hunt down the extra “proof points” DHS will now need to find.
“This is a really important shift and acknowledges the dedication and expertise of CPSU members working in DHS, as well as the community members, and community advocates who spoke out to tell their stories and worked tirelessly to raise awareness of the issues,” said acting national secretary Melissa Donnelly, describing robodebt as an “extraordinary mess” that would take a long time to clean up.
“Restoring human oversight to debt decisions is incredibly important, but the decision will mean nothing if there aren’t enough permanent, properly trained staff to do this complex work. There is a huge backlog of robodebts that have already been generated, and the department needs to be provided with more staff to get through this work.”
Greens Senator Rachel Siewert said robodebt was “totally unfair” and called on the government to apologise to the many people who had been distressed by it. “We need more information about what this will mean for those who already have debts raised or who have already paid them or are on a payment plan,” she added. “I call on the minister to be transparent about these changes. One wonders if the government is anticipating the outcome of cases currently before the court.”