Class action launched against Centrelink's 'robo-debt'

The class action into the 'toxic' data-matching initiative will be brought by Gordon Legal.

Shadow Minister for Government Services Bill Shorten has announced a class action against the federal government's Centrelink data-matching initiative.

The former Labor leader on Tuesday announced the class action into the initiative colloquially known as "robo-debt" would be brought by Gordon Legal on behalf of victims of the scheme. 

Shorten has been calling for robo-debt to be paused for years. Earlier this month, he called the federal government out for knowing the project is illegal.

He also previously labelled robo-debt "harsh and inaccurate", likening the scheme to having the same essential logic and ethics of a mob standover.

Shorten said on Tuesday that robo-debt -- including its reverse onus of proof -- is at best "legally dubious" and should rightly have its legality determined by a court.

"Other legal actions by robo-debt victims have invariably resulted in the government entirely waiving or dramatically reducing the claimed debt, and settling the action. But the individual nature of the actions has meant the legality of robo-debt generally has not been tested," he said.

Gordon Legal senior partner Peter Gordon said the robo-debt system removed money from innocent people who were legitimately paid their entitlements. He was also quoted by the ABC as saying the collection of money based solely on the "simplistic application of an imperfect computer algorithm" was wrong.

Shorten said that Gordon Legal is in discussions with several robo-debt victims who could be plaintiffs in the planned action. Others who have had legitimate Centrelink benefits "illegally clawed back" with an interest in the action can register their details on the Gordon Legal website, the Shadow Minister said.

The Department of Human Services (DHS) has been automatically issuing debt notices to those in receipt of welfare payments through Centrelink since 2016.

The Online Compliance Intervention (OCI) program automatically compares the income declared to the Australian Taxation Office (ATO) against income declared to Centrelink, resulting in debt notices -- along with a 10% recovery fee -- subsequently being issued when a disparity in government data is detected.

One large error in the system was that it incorrectly calculated a recipient's income, basing fortnightly pay on their annual salary rather than taking a cumulative 26-week snapshot of what an individual was paid.

"Robo-debt has already caused a trail of human suffering around this country -- persecuted retirees, stressed out students, parents being chased for alleged debts of their dead children, a mother who attributes her son's suicide to him being targeted by robodebt," Shorten said previously

"What is truly unconscionable is that Minister for Robodebt Stuart Robert refuses to call off the robo-debt hounds while knowing it could be illegal and actively working to prevent it being found just that. In fact he is considering expanding the scheme to even more vulnerable categories of people."

DHS in March last year told a Finance and Public Administration References Committee that its data-matching program went well because it produced savings, but this ignored claims from individuals that the OCI system caused them feelings of anxiety, fear, and humiliation, and reportedly even resulted in suicide.  

Minister for Government Services Stuart Robert has also responded to pleas to stop the program by saying that the government has a lawful responsibility to collect "where citizens have mismatched what they said they'd earn versus what, through their tax return, they've been shown to earn".

According to Robert, across Australia, as at 30 June 2019, there were 1.54 million outstanding social welfare debts he claims have a value just shy of AU$5 billion.

While the Coalition claims AU$1.9 billion has been returned funds thanks to robo-debt, the program has cost AU$375 million so far, but has only recovered a little over AU$326 million in overpayments, while at least 31,000 debt claims have been wiped.

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