Around $721 million in refunds will be issued to Australians charged robodebts, the government has revealed.
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The Federal Government will refund 470,000 debts issued by its robodebt program, Social Services Minister Stuart Robert announced on Friday afternoon.
The refunds will be issued for debt notices issued based on income averaging, a process by which ATO pay data was averaged out to estimate a welfare recipient’s income and then compared to welfare payments.
The robodebt scheme was intended to recover up to $4.5 million in Centrelink debt a day, but the government was forced to end the scheme in November last year.
The Federal Court also declared robodebt illegal in November last year.
The controversial system saw 686,901 debts raised, worth $1.4 billion.
“The Morrison Government takes its responsibility for upholding the integrity of Australia’s welfare system seriously,” a statement issued by the minister today read.
“Services Australia has identified 470,000 debts raised wholly or partially using income averaging of ATO data. Refunds will also be made for any interest charges and/or recovery fees paid on related debts.”
These refunds will be issued from July 2020.
The robodebt scheme has been at the centre of a class action brought by Gordon Legal on the basis that income averaging led to incorrect debt notices, causing “significant and unnecessary detrimental financial impact”.
The Guardian first revealed in late March that the government would be forced to issue hundreds of millions in refunds.
Services Australia will issue the refunds, telling affected customers hat they will not be required to do anything to receive the refund.
“Services Australia makes $180 billion in payments a year. Australians rightly expect the government to be resolute custodians of these taxpayer funds and to work diligently to prevent and recover overpayments.”
‘Untold suffering’: Australians respond
Greens Senator Rachel Siewert said she was “overwhelmed thinking of the untold suffering that this illegal scheme has caused”.
“It will be almost impossible to account for the social and economic costs of the Government's illegal robodebt scheme,” she said.
This is a historic day. I am overwhelmed thinking of the untold suffering that this illegal scheme has caused.— Rachel Siewert (@SenatorSiewert) May 29, 2020
It will be almost impossible to account for the social and economic costs of the Government's illegal #robodebt scheme. https://t.co/QDXBdwaY0c
It was revealed in December last year that a 22-year-old man’s death by suicide was linked to the scheme, after he received a debt notice of $2,000.
“All those people who suffered so much from the government’s robodebt intimidation and threats and withholding of money, the people who died, it absolutely breaks the heart,” added another on Twitter.
All those people who suffered so much from the govt’s #robodebt intimidation & threats& withholding of money, the people who died, it absolutely breaks the heart.— That Ungracious Dr Sheep Person🌱💧 (@noplaceforsheep) May 29, 2020
Shadow Minister for Government Services Bill Shorten also noted the lack of apology.
“470,000 Australians to be refunded $721 milion of robodebt. This doesn't help families who lost victims to suicide, or heal other harms, stresses & inconveniences caused. An apology? Not this government,” he said.