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The other shoe may have finally dropped regarding robo-debt, as a class action lawsuit is set to represent those unfairly targeted by the system.



According to Bill Shorten, a class action lawsuit it set to be tabled against the government’s robo-debt program, citing the 150,000 people it has targeted in error. Peter Gordon, the senior partner at the law firm bringing the claim said that he’ll “allege that to simply collect money from hundreds of thousands of people by the simplistic application of an imperfect computer algorithm is wrong. We think that before the Government docked the pensions or took the tax refunds of widows and carers and aged pensioners it needed to have better evidence, it needed to consider each case individually.”

According to Gordon, 160,000 fatuous debt claims can be tied to the system, and the case will seek compensation for those affected.

Combine this with the fact that Victoria’s Legal Aid service has already brought a test case to court, representing the first blow against the maligned robo-debt system, and the 500,000 it has targeted.

The Department of Human Services (DHS) quashed Legal Aid’s first test case when it suddenly wiped the $4,000 debt that a nurse apparently owed. Social service advocates believe this action to be motivated by the fact that the DHS would like to avoid a legal spotlight shined upon the scheme.

The subject of the second case, 33-year-old Deanna Amat, will take on the DHS over $2754 Austudy allowance debt. “My tax return was $1709.87 and they took every cent … It actually felt like I was being told I was guilty before I could prove my innocence. I couldn’t believe they could find out my personal ATO information and take away my tax return, but could not find my new address or contact details…It just adds to anxiety about money and the future. You’re trying to improve yourself and use that education and get a better job, and you have that debt looming over you,” Ms Amat told The Age and The Sydney Morning Herald.

In conversation with Fairfax, the DHS spokesman said it “would be inappropriate to discuss the details of a matter that is presently before the court…the Commonwealth Ombudsman, in reviewing our processes, found that it is reasonable and appropriate to ask people to explain discrepancies in data.”

The executive director of civil justice access and equity at Victoria Legal Aid, Rowan McRae, said the robo-debt system, was “opaque and unfair”, believing that the system causes significant mental and financial strain on the nation’s most vulnerable people.

“We’re committed to testing the lawfulness of this flawed scheme. For this to have a benefit for hundreds of thousands of other people, it needs to be done through the court,” McRae said.


How the system works

The automated system relies on an average (usually over a fortnight) to estimate former welfare recipient’s debt, rather than individually locating the details of each case. All correspondence from the DHS to the individual does not provide any explanation of how the debt was calculated, instead prodding the recipient to disprove the amount.

The department has also been criticised for how it has handled outstanding debts, including threats of wage garnishing, seizure of money from accounts and promises of building interest.

Earlier this year, the DHS disclosed to a Senate enquiry that $500 million had been clawed back, against a setup cost of $400 million.