Robodebt Royal Commission report unravels systemic injustice, requiring urgent reform
by Amy Schneider, Law Reform Lead – Social Security Access, Economic Justice Australia
On Friday 7 July 2023, the Royal Commission handed down its final report (the report) into the Robodebt Scheme (the scheme). The report is extensive with comprehensive analysis of the scheme spanning over 900 pages, 3 volumes, and providing 57 recommendations. It describes the scheme as a “crude and cruel mechanism,” that from its inception, was known to be inconsistent with social security law.
In examining the operation of the scheme, the report unravels systemic injustice and identifies areas of social security law, and administration, that require urgent reform. It also:
- highlights the role that societal stigma and dehumanising discourse played in fuelling and facilitating the schemes continuation to the detriment of those experiencing vulnerability
- emphasises the need for a cultural shift (led by politicians and the media) in how society views income support.
Background
The scheme operated in several iterations between 2015/2016 and 2019. It was introduced as a budgetary measure to recoup money allegedly owing to the Commonwealth. In short, the scheme used an automated system to identify inconsistencies between recipients’ fortnightly income reporting to Centrelink and their yearly earnings according to their ATO PAYG data. If there was a discrepancy between the income reported to Centrelink and ATO yearly earnings (averaged out across the financial year) in any fortnight, the system might automatically generate a debt.
Among other issues, the scheme was contrary to legislated social security payment rate calculators which require consideration of the actual amount earned in a fortnight to calculate a person’s fortnightly payment entitlement. Once a debt was generated, the recipient then needed to disprove it, often by somehow obtaining bank statements and payslips going back several years (in circumstances where the Department of Human Services/Services Australia (‘the Department’) had power to request or compel production of those documents). This effectively reversed the onus of proof from a powerful government agency to individual social security recipients.
For recipients seeking clarity on why a debt had been raised, the Department had limited engagement options. For certain periods during the scheme, recipients were sent letters without any contact numbers. The letters lacked information and did not identify why or how a debt had been raised. Recipients were directed to check information obtained from the ATO and submit payslips and bank statements online. They were often unable to have their issue resolved face to face at a Centrelink office, or over the phone.
Due to the increased demand for support caused by the scheme, the Department was forced to hire short-term employees without the requisite expertise or knowledge to deal with the volume of inquiries. The Royal Commission also received evidence that Centrelink refused to review debts without the provision of bank statements or payslips, and that some social security recipients felt pressure to pay their ‘debt’ by obtaining credit or through early release of their superannuation.
Many recipients were unaware they had a debt because they no longer received social security payments, had moved from their last known address, or had no reason to monitor their MyGov inbox. Other recipients were unable to respond to the letters, due to disadvantage, disability or distress. In some circumstances, debt collection was outsourced to private agencies who were incentivised to mention the suite of enforcement options available to Centrelink if ‘debts’ were not repaid.
Although there were certain ‘vulnerability indicators’ which meant some recipients were supposed to be excluded from the scheme or to receive higher levels of assistance, these were inconsistently applied and often ‘lapsed’ from a client’s profile, leaving those experiencing significant vulnerability subject to the scheme.
Despite several inquiries by regulatory and oversight agencies, and numerous AAT tier 1 decisions striking down the use of income averaging, the scheme remained in place from 2015/2016 to 2019.
Experience of people affected by the scheme
The Commission heard evidence from those with lived experience who were victim to the scheme, including from the mothers of children who had died by suicide after receiving debt notices. Chapter 10 provides an in-depth summary of the impacts of the scheme on victims and excerpts their experience in their own words. The Commission acknowledged the distress and human cost of the scheme, which specialist social security legal services witnessed directly when providing front-line services during the life of the scheme.
Findings and recommendations
Many of the report’s findings and recommendations recognise the contribution of advocates from the legal assistance and social services sectors, and grassroot activists, in bringing attention to the scheme’s unfairness and unlawfulness over many years. These efforts were often ignored by government and discredited in the media.
Broadly, the recommendations speak to the need for:
- systems change, training, and cultural shifts within and outside of government
- more robust accountability measures and regulatory/oversight agencies
- greater safeguards in relation to privacy, data matching and automation
- greater investment in legal assistance and social services, to build service delivery and advocacy capacity, and better mechanisms for consultation and input to government services and initiatives.
In making specific recommendations regarding the need for improved engagement, consultation, and funding the Commission recognised the role advocacy and specialist social security legal services have in preventing the repetition of the scheme.
Economic Justice Australia supports the report’s recommendations, many of which were included in our submissions to the Royal Commission. We particularly welcome the recommendations concerning:
- Recognising the work of community legal centres, legal aid commissions and advocacy organisations and the need to better fund these services
- The need to implement an advocacy contact line for the legal assistance, social services, and advocacy sector so an advocate can have direct contact with Services Australia
- The need to design and administer systems with users in mind and make the necessary adjustments to service delivery for those experiencing vulnerability
- Recognising the importance of genuine consultation with peak bodies and stakeholders
- The need to establish a body to monitor government’s use of automated decision making
- Reintroducing a limitation period for social security debts to be recovered
- The need to overhaul debt recovery and compliance systems and practices
- Ensuring the Department responds appropriately to administrative appeals (or equivalent) decisions.
The recommendations bring hope that we may soon see a fairer social security system. However, it is important to acknowledge many of the characteristics of the scheme remain present in social security administration and service delivery. For example:
- debt letters remain opaque with limited information about why or how a person has accrued a debt
- some significant decisions, which result in payment suspensions and leave people without income, remain automated.
What comes next?
Following the scheme’s conclusion in 2019, Gordon Legal brought a class action against the Commonwealth on behalf of those affected by Robodebt, which resulted in one of the biggest settlements against the Commonwealth in Australia’s history. However, the $1.8 billion settlement reflected the scale of the scheme, rather than the nature of the redress the settlement provided. Most people who were part of the class action only received nominal payments representing payments made towards the debts and lost interest. In addition, many people affected by the scheme did not meet the qualifying requirements to be part of the class action.
The report considered establishing a redress scheme but concluded it not to be feasible considering the different injuries incurred by those caught up in the scheme. It also considers the role of the Scheme for Compensation for Detriment Caused by Defective Administration and seems to leave the door open for common law actions in tort for misfeasance in public office.
Critically, in discussing the role and availability of different forms of compensation, the Royal Commission states that perhaps the most appropriate response from government would be to raise the rate of social security payments. In so doing, the Commission recognises the central role financial security plays in affording social security recipients the dignity they are entitled to.
The report is a compelling advocacy tool, making direct recommendations regarding the need for adequate funding of legal service providers and social security advocates, the need for systems and cultural change within government, and the importance of genuine consultation as a means of ensuring those whose rights are affected are placed in the centre of decision making, to promote true reform.
The government must now implement urgent reforms to ensure the conditions that led to the scheme can never be repeated. The most important of these relate to the lack of transparency in decision-making, the reversal of the onus of proof in relation to social security debts, and the increasing use of automation and digitisation without adequate oversight or consideration of the impact on people who rely on social security payments to survive.
