Robodebt scheme
The Robodebt scheme was an unlawful method of automated debt assessment and recovery implemented in Australia under the Liberal-National Coalition governments of Tony Abbott, Malcolm Turnbull, and Scott Morrison, and employed by the Australian government agency Services Australia as part of its Centrelink payment compliance program. Put in place in July 2016 and announced to the public in December of the same year, the scheme aimed to replace the formerly manual system of calculating overpayments and issuing debt notices to welfare recipients with an automated data-matching system that compared Centrelink records with averaged income data from the Australian Taxation Office.
The scheme has been the subject of considerable controversy, having been criticised by media, academics, advocacy groups, and politicians due to allegations of false or incorrectly calculated debt notices being issued, concerns over impacts on the physical and mental health of debt notice recipients, and questions around the lawfulness of the scheme. Robodebt has been the subject of an investigation by the Commonwealth Ombudsman, two Senate committee inquiries, several legal challenges, and a royal commission, Australia's highest form of public inquiry.
In May 2020, the Morrison government announced that it would scrap the debt recovery scheme, with 470,000 wrongly-issued debts to be repaid in full. Amid enormous public pressure, Prime Minister Scott Morrison stated during Question Time that "I would apologise for any hurt or harm in the way that the Government has dealt with that issue and to anyone else who has found themselves in those situations." However, the Morrison government never offered a formal apology before it was voted out of office in 2022.
The Australian government lost a 2019 lawsuit over the legality of the income averaging process and settled a class-action lawsuit in 2020. The scheme was further condemned by Federal Court Justice Bernard Murphy in his June 2021 ruling against the government, where he approved a A$1.8 billion settlement, including repayments of debts paid, wiping of outstanding debts, and legal costs.
Going into the 2022 Australian federal election, Australian Labor Party leader Anthony Albanese pledged to hold a royal commission into the Robodebt scheme if his party was elected. After winning the election, the Albanese government officially commenced the Royal Commission into the Robodebt Scheme in August 2022. The commission handed down its report in July 2023, which called the scheme a "costly failure of public administration, in both human and economic terms", and referred several individuals to law enforcement agencies for prosecution. The report also specifically criticised former Prime Minister Scott Morrison, who oversaw the introduction of the scheme when he was the Minister for Social Services, for misleading Cabinet and failing in his ministerial duties.
In October 2022, the Albanese government effectively forgave the debts of 197,000 people that were still under review. In August 2023, the Albanese government passed a formal motion of apology in the House of Representatives, apologising for the scheme on behalf of the Parliament.
Origins
Background
Since the late 1970s, the Australian Taxation Office has used data-matching systems to compare income data received from external sources with income reported by taxpayers, to ensure taxation compliance. In 2001, Services Australia piloted a program that compared a customer’s Centrelink income details with ATO data, to identify discrepancies in the information provided to Centrelink. Where there was a discrepancy, Services Australia would decide if the customer had been overpaid and had a debt that should be recovered. This program was fully rolled out in 2004. The IMS identified roughly 300,000 possible discrepancies per year. Services Australia would identify and investigate roughly 20,000 of the highest risk discrepancies per year, but were unable to investigate the remaining discrepancies, due to the costs and resources involved in manually investigating and raising debts. The IMS continued largely unchanged until the introduction of the Robodebt scheme in 2016.Creation and announcement
In April 2015, measures to create budgetary savings by increasing the pursuit of outstanding debts and investigation of cases of fraud in the Australian welfare system were first flagged by the Minister for Social Services Scott Morrison and the Minister for Human Services Marise Payne, and formally announced by the Abbott government in the 2015 Australian federal budget. Initial estimates in the 2015 budget projected that the scheme would recoup A$1.5 billion for the government.In 2015, the Department of Human Services conducted a two-stage pilot of the Robodebt scheme, targeting debts of selected welfare recipients that were accrued between 2011–2013. Following the 2015 Liberal Party Leadership Spill and 2016 Australian federal election, the Turnbull government implemented an overhaul of the federal welfare budget in an effort to crack down on Centrelink overpayments believed to have occurred between 2010 and 2013 under the Gillard government.
On 20 September 2015, Prime Minister Malcolm Turnbull announced that Christian Porter would replace Scott Morrison as Social Services Minister as part of a Cabinet overhaul.
In July 2016, the manual system began to be replaced with the Online Compliance Intervention, an automated data-matching technique with less human oversight, capable of identifying and issuing computer-generated debt notices to welfare recipients who had potentially been overpaid. The new system was fully online by September 2016. In December 2016, Minister for Social Services Christian Porter publicly announced the implementation of this new automated debt recovery scheme – which was given the colloquial name "Robodebt" by the media – was estimated to be capable of issuing debt notices at a rate of 20,000 a week.
Operation and public reaction
Iterations and official names
The scheme went through several iterations and formal names, including:- PAYG Manual Compliance Intervention program, from 1 July 2015 to 1 July 2016, including the associated pilot programs from early 2015 to 30 June 2015.
- Online Compliance Intervention from 1 July 2016 to 10 February 2017.
- Employment Income Confirmation from 11 February 2017 to 30 September 2018.
- Check and Update Past Income from 30 September 2018 to 29 May 2020.
Debt recovery efforts
The 2018 Australian federal budget indicated that the Robodebt data matching scheme would be extended into 2021 with the aim of recovering an additional from welfare recipients.
Services Australia announced in September 2019 that expenditure on the Robodebt program was while recouping.
Reactions and critiques
Opponents of the Robodebt scheme said that errors in the system were leading to welfare recipients paying non-existent debts or debts that were larger than what they actually owed, whilst some welfare recipients had been required to make payments while contesting their debts. In some cases, the debts being pursued dated back further than the ATO requests that Australians retain their documentation. Particular criticism focused on the burden of proof being moved from Centrelink needing to verify the information, to being on the individual to prove they did not owe the funds, with human interaction being very limited in the dispatch of the debt letters. The system also did not explain the details of the overpayment including when the overpayment occurred or how the debts were calculated.Politicians from the Australian Labor Party, Australian Greens, Pauline Hanson's One Nation, and Independent Andrew Wilkie criticised the scheme and its automated debt calculation methods. The scheme was also criticized by advocacy groups for people affected by poverty, disadvantage, and inequality, including the Australian Council of Social Services and the Saint Vincent de Paul Society.
Allegations of misconduct
Allegations levelled against the scheme by the media, former and current welfare recipients, advocacy groups, politicians and relatives of welfare recipients include:- Welfare recipients' suicide after receiving automated debt recovery notices for significant sums.
- Debt notices were issued to deceased people.
- Issuing debt notices to disability pensioners.
- Revelations that debt notices were issued to 663 vulnerable people who died soon after.
Initial investigations
Commonwealth Ombudsman investigation
After the Turnbull government implemented the Robodebt scheme, many recipients of debt notices filed complaints with the Commonwealth Ombudsman. This led to the agency investigating the scheme, with the final report and recommendations delivered in April 2017. The ombudsman recommended that the Department of Human Services should:- reassess the debts raised by the scheme
- improve the clarity of debt notices and give customers better information
- inform customers that their ATO income will be averaged across the relevant period if they do not enter their income information
- notify welfare recipients that debts based on averaged ATO income may be less accurate
- help welfare recipients to gather evidence with which to effectively respond to debt notices.