Federal court judge Justice Bernard Murphy has slammed the commonwealth’s robodebt scheme, describing it as a ‘massive failure of public administration’.
Murphy on Friday approved a settlement worth $1.8 billion for hundreds of thousands of people who were wrongly issued with Centrelink debts.
He found the commonwealth ‘unlawfully asserted’ at least $1.763 billion in debts against roughly 433,000 Australians between July 2015 and November 2019.
“Then, including through private debt collection agencies, the commonwealth pursued people to repay these wrongly asserted debts, and recovered approximately $751 million from about 381,000 of them,” Murphy said in his judgement.
“The proceeding has exposed a shameful chapter in the administration of the commonwealth social security system and a massive failure of public administration.”
He said the fact that many welfare recipients don’t earn constant income or work set hours ‘should have been obvious’ to the senior public servants and ministers running the scheme.
“Where a social security recipient does not earn a constant fortnightly wage, does not earn income every fortnight, or only works for intermittent periods in a year, their notional or assumed fortnightly income based on income averaging is unlikely to be the same as their actual fortnightly income,” he noted.
“It should have been plain that in such circumstances the automated robodebt system may indicate an overpayment of social security benefits when that was not in fact the case. Yet, in the absence of further information from social security recipients, that is the basis upon which the automated robodebt system raised and recovered debts for asserted overpayments of social security benefits.”
"Gordon Legal and our clients are delighted that the settlement has been approved by the Court, bringing closure for so many people who have been affected by the Robodebt scheme. We hope that this outcome brings peace of mind and some certainty to all class action members." pic.twitter.com/k2SlWEKCTQ
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— Gordon Legal (@gordonlegal_au) June 11, 2021
The class action has been led by Gordon Legal. As a result, the commonwealth will — without admission of liability — pay $112 million in compensation to roughly 394,000 people, and refund more than $751 million in debts.
More than $1.7 billion in financial benefit will have been provided to approximately 430,000 group members since the class action began, Gordon Legal noted.
The government has also agreed to drop claims for repayment of hundreds of thousands of dollars in invalid debts.
The Community and Public Sector Union and the Australian Council of Social Service have backed the federal court judgement.
CPSU national secretary Melissa Donnelly said union members working in Centrelink were raising concerns about the scheme with the department before it was rolled out.
“Had the department and the ministers responsible respected the expertise and experience of their own workers and listened to what they were saying, this ‘shameful chapter’ would never have occurred,” she said.
“Our members are experts; they are on the frontline of this work every day. Had they been listened to at the outset, hundreds of thousands of Australians would have been spared untold financial and emotional stress.
“With the government continuing to initiate new schemes targeting welfare recipients, like the recently launched employer dob-in line, it is vital that it learns lessons from robodebt and takes welfare policy seriously.”
Gordon Legal and its clients were ‘delighted’ by the approved settlement, according to Gordon Legal partner Andrew Grech.
“We hope that this outcome brings peace of mind and some certainty to all class action members and acts as a strong deterrent against similar callous welfare practices for both present and future governments,” he said in a statement.
Shadow minister for the NDIS and government services Bill Shorten said the settlement was the ‘second-best option’ for the victims of the scheme.
“I think for the hundreds of thousands of our fellow Australians who were living on the edge in the margins and were unlawfully sued by the government, I think what they really wanted is that the government never behaved unlawfully to begin with,” he told ABC News.