The federal government plans to refund more than 400,000 Centrelink debts as part of a looming class action against the controversial robodebt scheme.
A ministerial submission to cabinet shows the debts add up to $555.6 million, The Guardian revealed on Friday.
Prepared in February by government services minister Stuart Robert, social services minister Anne Ruston, and attorney general Christian Porter, the submission said roughly 80,000 debts would be reassessed before “refunding or reaffirming the debt”.
“Services Australia estimates that it will administer 449,500 refunds determined under the programme, and their associated repaid debts would be refunded commencing in July 2020 and concluding within 12 months,” it stated.
The government’s legal representatives would be instructed to begin settlement negotiations at an upcoming class action from Gordon Legal, the submission showed. The law firm argued the government had taken money from Centrelink recipients unjustly.
It follows a landmark Federal Court case last year, which saw the Commonwealth admit one robodebt was invalid due to the use of income averaging — the most controversial aspect of the debt recovery process — in the absence of concrete evidence. Income averaging left many welfare recipients having to prove they had not been overpaid, or else they would be forced to pay back a debt.
Shortly after the decision, the Senate passed a motion calling on the government to table legal advice that showed “when and for how long the government had information on the legality of robodebt”.
The ministerial submission also revealed roughly 18,000 recipients who agreed to the use of income averaging to calculate their debt could potentially be refunded. They stated the government had planned to prevent future debts through the Australian Taxation Office’s Single Touch Payroll system, which requires employers to report their workers’ payroll information.
It is unclear how the situation will play out during the unprecedented coronavirus pandemic, with the court hearing originally scheduled for July.
Services Australia has this week seen an influx of individuals in Centrelink queues across the country, online and over the phone, all seeking welfare payments after losing their jobs as a result of the pandemic.