Class action to target government over ‘robotdebt’ scheme

Centrelink scheme to be subject of Labor-backed class action

Centrelink’s controversial ‘robodebt’ scheme will be the subject of a class action led by law firm Gordon Legal with the support of the Labor Party.

The scheme — formally known as the Online Compliance Initiative (OCI) — involves automatically generated letters being sent to former and current welfare recipients demanding that they prove they were not overpaid by Centrelink.

The data-matching program takes Australian Taxation Office (ATO) income records and matches them with Centrelink clients. Centrelink’s algorithm assumes that the ATO-reported annual income of an individual was earned at an equal rate throughout the year, leading to letters being sent asking highlighting a possible debt being owed to Centrelink even in cases where there is no conflict between the data sets.

A 2017 report from a Senate inquiry called for the system’s suspension.

“Throughout this inquiry, the committee heard many personal accounts of the stress and distress the automated debt recovery system has caused recipients,” the report stated. The OCI system involved a “fundamental lack of procedural fairness” that was “evident in every stage,” the report said.

“This lack of procedural fairness disempowered people, causing emotional trauma, stress and shame,” the inquiry concluded.

The class action over the program was announced today by shadow minister for government services Bill Shorten and Gordon Legal senior partner Peter Gordon.

A class action makes sense because “a template approach has been applied across 800,000 people, and there are admittedly, on the part of the government, over 150,000 errors which have been made,” Gordon told a press conference.

“That's a very large number of mistakes which have been made. If they've been made, there is a limit to the ability of any court system and indeed bureaucracy to pick them off one by one.

“We think it’s appropriate that if there are common issues which have been got wrong by the Commonwealth, that they be addressed in a way that gives everyone release, not just those who are able to access lawyers and legal aid or have the wherewithal or indeed have the  records to be able to do it themselves.”

“Let’s be clear, we've asked the government to fix robodebt and they don’t want to fix it,” Shorten said. “If the government through parliament won’t fix the problem, then I form the view that giving justice to victims through the use of class action is a legitimate, political approach to take,” the Labor MP said.

“The law firm will challenge on behalf of affected persons the Government’s use of a flawed calculation system by Centrelink to unlawfully take back tens of millions of dollars from many thousands of Centrelink recipients, including pensioners,” said a statement released by Gordon Legal.

“The money for pensioners, carers, widows, students, farmers and unemployed people was taken from them due to a one -size-fits-all online compliance system.”

The statement said that Shorten had raised the issue of the system’s legality with the law firm.

“The basis for the challenge is that that the Federal Government financially benefited when it wrongfully took and banked money that legitimately belonged to recipients,” the statement said.

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