The Centrelink robodebt scheme is over. Rather than face scrutiny in the largest class action in Australian history, the federal government agreed to repay more than $700 million in fake debts levied against welfare recipients from 2015 to 2019. An additional $400 million in debt claims has been wiped and $100 million has been provided for compensation. The Liberals knew from at least 2017, if not from the start, that robodebt was unlawful. But they pursued the policy for years and settled out of court just hours before the case against them was to begin.
Carly Benfell, 32, received a letter from Centrelink in 2015. It said she owed the government $18,000 and had a month to pay it back. Benfell had just moved back to Adelaide to leave a violent relationship. “I was well and truly trying to get back on my feet, living pay cheque to pay cheque, paying down some other debts I’d accrued in that relationship”, she says. “Then that letter came in the mail and ‘What the fuck’ were my actual first words. ‘That’s got to be a mistake.’”
Benfell’s debt, like that of nearly 490,000 others caught in the government’s fraudulent scheme, was calculated by the Department of Human Services, which took her annual income, as recorded by the Australian Taxation Office, and averaged it across the year. The department’s automated system concluded that she had misrepresented her income each fortnight to Centrelink. The Liberals removed all human oversight of these calculations to raise billions in revenue. Staff no longer investigated suspected overpayments before sending debt letters to welfare recipients, and debts had to be disproved by victims, not proven by Centrelink.
In the first year of the scheme, debt notices increased from 20,000 to 800,000, according to a 2017 Senate community affairs references committee report. While some were revised after being contested, the government typically persisted even after “debtors” proved they had done nothing wrong.
Benfell, now a social worker, tried explaining to Centrelink that her contract work in schools was term by term; there were times when she was earning nothing and needed assistance. She called former employers to collect seven-year-old payslips, but Centrelink did not relent. “I got together what I could and sent them all in and they basically just said, ‘Too bad’”, she says. “I was relentless calling them, [but] I found the process really overwhelming, just stonewalled left, right and centre.”
In January 2017, independent MP Andrew Wilkie wrote to the commonwealth ombudsman about the concerns raised with him by current and former Centrelink employees. Workers had daily debt enforcement quotas, and management made staff compete for the most enforcements. Those who showed sympathy to robodebt victims were forced out of the department. “Officers are discouraged from looking too closely at complex cases and have been managed out of debt recovery if too many questions are asked”, Wilkie wrote. “Officers have been penalised for actively suggesting [repayment deferral] to customers as an option.”
Tim Arnot, a Brisbane teacher, contested a $3,000 debt notice he received in 2018. While Centrelink eventually revised its claim, he faced roadblocks all the way. “They scrutinised my payslips with a fine-toothed comb. I had to field calls from them to explain the pay codes, even the sick leave that I’d taken across the year.” Anyone who’s been forced to wait for hours on call waiting, or had paperwork rejected for trivial reasons, knows the mental distress that Centrelink seems designed to engender. “I was expecting my first child. I kept the debt secret from my partner until I had resolved it because I knew the level of stress would be very taxing on her.”
Liberal cabinet ministers were fully aware that the “fortnightly income assumption” was a fraudulent and unlawful basis on which to calculate debt. Gordon Legal, the firm pursuing the class action, argued: “The Commonwealth knew that ... the social security law did not contain any provision empowering it to raise and recover any Asserted Overpayment Debt, or impose any penalty thereon”. The statement of claim listed 76 cases in civil tribunals in which robodebt was deemed unlawful. Why did the government not appeal a single decision? Because it knew the scheme was bullshit and did not want the attention of a higher court drawn to that fact. The system was not about fairness or even compliance: it was about the government taking money from the poor any way it could.
At first, people receiving debt notices were not aware that the shock they felt was replicated in a hundred thousand homes. Eventually, the breadth of the scheme came into focus. Stories began to emerge on social media under the hashtag #notmydebt. “When I told them that it was making me anxious, they said that must mean I had done the wrong thing”, read one. “Working casual, doing courses and also homeless with 2 children to worry about”, said another.
In May 2019, Madeleine Masterton took the Department of Human Services to court over her debt. The department dropped the debt rather than argue its case. The flagrant unlawfulness of the scheme was making it increasingly untenable for the government to enforce. Yet the Liberals persisted, wringing as much misery as they could before their hands were tied.
In August 2019, Government Services minister Stuart Robert outlined a plan to the cabinet to recoup $2.1 billion by targeting age and disability pensioners as well as Indigenous people in remote areas. The plan would have hit an additional 350,000 vulnerable people, termed “sensitive cohorts” by Robert.
The following month, Gordon Legal began fielding clients for a class action. Another debt was dropped against Deanna Amato in November, who also had chosen to fight the Department of Human Services in court. “I’m stunned that it was recalculated so easily after I took legal action”, Amato said after the Federal Court hearing. A freedom of information request subsequently revealed that Centrelink had underpaid Amato by $480.
At this point, the government began quietly to refund debt payments. Andrew Jamieson, a retired wharfie, had had his age pension payments reduced without his knowledge due to a $5,000 robodebt, only to see it suddenly restored. “When Gordon solicitors began making noises about class action, my payments went back up to ‘normal’, again without explanation, apology or reason. So I joined the class action”, he says via email.
By April this year, the government had given up on most of its debt claims. Ninety percent of debts had been refunded by the time it finally conceded on 16 November.
If welfare recipients had not raised their voices and challenged the bureaucratic behemoth of Centrelink—if they had curled up as the government hoped they would—then who knows how many more fake debts would have ruined how many more lives. Benfell wants the government to know “how much it underestimated the group of people that it was trying to rort money out of. We know we’re more than this dollar sign you hung over our head of what we owed”.
But the settlement leaves a bitter taste. Just $112m in compensation is allocated for 400,000 of the victims—less than $280 per person. The government argues that, because it has admitted no wrongdoing, this money is simply for interest owed and not for pain and suffering inflicted. Did pensioners like Barry Cole, who, at 85 years old, was forced to pay $21,000, not suffer? Will getting back interest heal the wounds of Kath Madgwick, whose 22-year-old son Jarred committed suicide the day he found out about a $2,000 robodebt?
In 2016, minister for Human Services Alan Tudge sent welfare recipients a warning. “We’ll find you, we’ll track you down, you will have to pay these debts and you may end up in prison”, he said. For four years, he and his colleagues ran an illegal racket collecting fake debts from the poor. They knowingly committed a crime incalculably worse than the one they threatened to imprison people over. “For that alone these bastards should have to pay far more than repaying those they stole from”, Jamieson says. Yet not a single minister or senior official has been forced to resign over the scandal, let alone ended up in prison. Some justice.