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‘They nearly cost me my life’: How robo-debt turned lives upside down

As the federal government not only prepares to repay $720 million in robo-debts it concedes were unlawful, but also gears up for a mammoth class action lawsuit that could see it pay millions more in compensation, lawyers, activists, politicians and victims wonder how a policy billed as a nifty savings tactic ever came to this.

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“No one who genuinely needs social welfare support and who is honestly disclosing their employment income and non-employment income will be worse off under our commitment,” then treasurer Scott Morrison said when announcing the robo-debt scheme amid a slew of changes projected to save $2.3 billion, less than a week before the 2016 federal election.

“The measures we announced today go to assisting people that are in receipt of welfare payments to better be able to comply with the requirements of that system.”

Deep in the policy was a plan to “income data-match” – with a twist. Since 2004, both Labor and the Coalition have compared welfare recipients’ income reporting to information from the Australian Tax Office to see if it was accurate.

The Coalition removed the role of Centrelink staff in that process. Previously they would have investigated a discrepancy between claims and tax office data, but after the change it was assumed that if there was a discrepancy, there was a debt. The onus was now on welfare recipients to contact Centrelink with payslip information to dispute the alleged debts.

Before the Coalition’s policy was introduced, about 20,000 welfare recipients were notified of potential debts each year. Robo-debt was issuing 20,000 notices each week. By the summer of 2016, the trickle of concerns had become a flood.

“December is usually a quiet time of year for us,” says Rowan McRae, the Victoria Legal Aid lawyer who steered the test robo-debt lawsuits essential to the upcoming class action. “In 2016, it was not a quiet time of year. We suddenly had all these people calling through with these letters they received. It was quite distinct.”

Two key problems with the program were quickly realised. First, ATO data was averaged over the year, so the algorithm thought some people with up-and-down income were lying about it. And second, if an employer made a mistake with the information it gave to the tax office, it could lead to Centrelink believing welfare recipients held two jobs instead of one.

Asher Wolf, a long-time robo-debt activist who helped bring the issue into the mainstream, said the policy was announced “quietly in a government gazette”.

“There were a few articles here and there – one from The Australian, a couple from Triple J – mostly focused on students getting debts,” she says.

“Then, suddenly, a lightbulb went off.”

Greens senator Rachel Siewert says “a couple of emails” started “turning into a flood” over the school holidays.

A group of digital rights activists and privacy advocates set up a “network operation command” for the movement through the online messaging system Slack, bringing in lawyers, activists, academics, Freedom of Information request experts, financial aid services and politicians to kick up a fuss about robo-debt.

Wolf feared welfare recipients were losing homes, relationships and sometimes their lives while robo-debt marched on.

“We had to call emergency services in response to someone self-harming on a Twitter livestream because of a robo-debt,” she says.

“I worried every single day of that campaign. You came across people who were desperate. They were hungry or they were terrified they were going to lose their house.”

Greens senator Rachel Siewert says "the pain and suffering people have felt is totally real".

Greens senator Rachel Siewert says “the pain and suffering people have felt is totally real”.Credit:Dominic Lorrimer

Siewert says despite pressing the issue relentlessly at inquiries, Senate question time and estimates, “it was really, really hard to interrogate”.

“The sheer numbers, and the failure of the agency to listen … I just remember people coming in with these big files of information – spreadsheets and letters and numbers,” she says.

“The pain and suffering people have felt is totally real. It is totally genuine. I’ve sat in front of people in tears. We’ve had family members that directly blame robo-debt for the death of their loved ones.”

Despite a mammoth coordination across civil society, the campaign still took time.

McRae says they filed the first test case in February 2019: “She was a young woman who worked as a nurse and she had this alleged robo-debt of $4000 from when she received Youth Allowance.

“Soon after we filed, Centrelink wiped her debt. We were facing an argument from Centrelink saying her case shouldn’t continue.”

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So McRae filed a second test case in June 2019. And this time it worked – the federal government settled the case for an undisclosed amount and conceded the debt was unlawful.

Soon after, shadow minister for government services Bill Shorten phoned Peter Gordon, a leading class action lawyer, and asked him if he rated the chances of putting together a much bigger claim.

“I gave it to a couple of the junior people – a lawyer and a law student in my office – and didn’t think too much more about it,” says Gordon.

The pair from Gordon Legal found something. A rarely-used tort called unjust enrichment could be used to bring forward a class action, they thought. Gordon wasn’t sure. Two senior lawyers were brought in.

Eventually, the four of them sat Gordon down for two hours and presented their case.

“I went back to Bill [Shorten] and said we’re going to take it to the next stage. It went from there,” Gordon recalls.

Shorten says the robo-debt fight is not over yet.

“The government know they’re in trouble with this class action,” he says. “This is not over until the grieving mothers and the various victims of robo-debt are repaid the money stolen from them with interest and a just payment for stress, damage and loss.”

Last Friday, the federal government announced it would refund $720 million to 330,000 Australians from unlawful debts raised since July 2015.

Digman was one of hundreds of thousands hit with an unlawful robo-debt.

Digman was one of hundreds of thousands hit with an unlawful robo-debt.Credit:Penny Stephens

Gordon will push on with the class action, seeking not just repayment but compensation for lives lost and derailed. The federal government has refused to apologise for the scheme, citing the upcoming legal battle.

Government Services Minister Stuart Robert did not comment.

Services Australia General Manager Hank Jongen says he will not comment on the class action while it is before the court.

“Our staff help people facing difficult situations every day and we don’t ever want people to feel they’re in a situation of helplessness,” he says.

Digman believes he deserves compensation.

“They nearly cost me my life. When the Prime Minister said in Australia ‘when you have a go, you get a go’, I was absolutely outraged. If you have a go, they have a go. I was doing my best and I was attacked and savaged by this government for it.”

Support is available for those who may be distressed by phoning Lifeline 13 11 14; Mensline 1300 789 978; beyondblue 1300 224 636.

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