• Tue. Nov 29th, 2022

Robodebt faces judgment as royal commission begins

ByChad J. Johnson

Oct 30, 2022

Deanna Amato never imagined she would face the federal government in court. But then, in 2018, she opens her tax return and receives a shock: her entire refund has been seized.

When she asked why, she learned that she was in debt of $2,754, which is now widely known as “robodebt”.

“I was really shocked,” she told ABC at 7:30 p.m.

“It gives you anxiety and just makes you worry about what you’ve done.”

She became a reluctant test case, challenging the debt in court and ultimately winning a landmark case against the federal government in a decision that paved the way for the end of the Robodebt scheme.

“I was really hoping that would be the only case that would change things,” she told ABC at 7:30 a.m.

“I think there were so many out there, that if it wasn’t me there would have been someone else for sure.”

On Monday, a royal commission on the now-defunct program begins.

Ms Amato’s case is likely to be one of the issues investigated, as the investigation delves deep into the origins of the scheme and at what stage officials were made aware of its legality.

Robodebt meant automating debt collection activities

The robodebt program matched income data from the Australian Revenue Service with income reported to Centrelink by welfare recipients.

If an anomaly has been detected, people usually receive a letter requesting additional information, such as payslips and bank statements, sometimes years earlier.

While data matching had been used in small amounts under previous governments, the coalition government greatly expanded its use, claiming it as a key budget measure.

It was the subject of heavy criticism from various civil and legal groups, as this system placed the burden on welfare recipients to effectively prove that they did not owe money.

The coalition government has defended its handling of the program, arguing that it was an important compliance measure.

Deanna Amato says she applied for Austudy in 2012.(ABC News: Danielle Bonica)

Ms Amato started receiving Austudy, a student support allowance, when she started studying in 2012. She previously worked full-time in a bar.

“It makes a huge difference. Studying full time, you don’t have a lot of time to work,” she said.

“So Austudy was really important. And he was offered. So, you know, I applied and did what I thought was right.”

When concerns were first raised about the robodettes in 2015 and 2016, she didn’t pay much attention. But that changed in 2018.

Unbeknownst to her, Centrelink had attempted to contact Ms Amato.

However, the address it contained in their systems was the one she no longer lived at. She had no obligation to update her address, as she was no longer receiving child support.

When her tax return was seized, she learned that she too had a debt of $2,700. Centrelink had also imposed a 10% “penalty” and added it to the bill.

“I thought I had reported everything correctly. But, obviously, when this robotic debt catches up with you, you wonder what you did,” Ms Amato said.

“And, you know, you also try to think back to the previous five years.”

She turned to Victoria Legal Aid for help. He had an entire hotline dedicated to Robodebt cases, as more and more calls were coming in every week.

When he began to review her file and the old payslips she had kept, Ms. Amato was relieved to learn that it appeared the debt was in error.

“It was just, obviously, an error on their part or the robodebt algorithm,” she said.

“And then, by digging into my payslips, which I was lucky enough to keep, I actually declared all my wages in pennies and really proved the debt to be incorrect.”

At this point, Mrs. Amato could have walked away, cleared the debt and moved on with her life.

However, there was another option: mounting a test case, with the support of Victoria Legal Aid, challenging the legality of the debt in Federal Court.

It was not an easy decision. Taking his case to Federal Court could prove that the government was racking up debt illegally.

It could, on the other hand, be a costly affair if she loses.

Exterior of Melbourne Federal Court.
The Federal Court case had a profound impact.(ABC News: Darryl Torpy)

“There was a big part of me that wanted to do it. Because, you know, I felt like what they were doing was wrong,” she said.

“There was another part that was quite scared, because it’s the government.

“But, ultimately, it was seeing all the evidence and how clear it was to me.”

At the time, many more cases were emerging of vulnerable Australians with these debts.

“Sometimes I was a little angry that they could do that. And also upset for people who were in more difficult situations than me,” she said.

Lawyer in robes outside court walking down Brisbane street
Deanna Amato challenged the legality of the debt in federal court and won.(ABC News: Lucas Hill)

Ms Amato decided to go ahead with the case – and she won.

In November 2019, the Federal Court issued consent orders with Ms Amato and the Commonwealth, finding key elements of the robodebt process to be unlawful.

The Commonwealth recognized that it was illegal to incur debt solely by averaging tax data and that it was illegal to impose penalty charges based on the information it had.

“I was so relieved when we got this result,” Ms Amato said.

“If they could prevent other people from being in the same situation, then it was worth it.”

The case had a profound impact. Just two weeks before the judgment, ABC 7.30 revealed that the Ministry of Social Services had suspended collection activities for debts incurred in this way.

Terry Carney wears a white shirt under a blue suit jacket
Terry Carney has become a vocal critic of the robodebt program.(ABC News)

“It was more the test case that stopped Robodebt in its tracks,” Terry Carney, a former senior member of the Administrative Appeals Tribunal, told ABC at 7:30 a.m.

“Centrelink accepted that it had no legal basis to stand on. It didn’t even have a shred of argument that it could go to court to try to make.”

A class action lawsuit led by Gordon Legal also quickly gained momentum.

There were 386,193 participants registered for the action, out of a total of 433,000 Australians who had debts against them.

The class action was settled before judgment, without the Commonwealth admitting liability. However, the result was that some $721 million in recovered debt was repaid to Centrelink beneficiaries.

Over $112 million in interest was also paid on top of that.

The “black box” of government decision-making

The royal commission due to start on Monday is expected to take a close look at the origins of the robodebt system and key points along the way where warnings have been given.

While Ms Amato’s case highlighted there was a problem with the legality of robodebts, the Commonwealth Ombudsman had previously stressed he was concerned that Services Australia could immediately freeze all debt collections more widely for the robodebts.

Space to play or pause, M to mute, left and right arrows to search, up and down arrows for volume.
Play the video.  Duration: 1 minute 53 seconds

Robodebt saga can never happen again, says Prime Minister.

However, much remains unknown about what happened inside the government.

Although various attempts have been made over the years to gain access to crucial program documents through parliament, litigation or freedom of information laws, many of these efforts have been unsuccessful.

The sweeping powers of the royal commission are likely to see hundreds of thousands of documents produced on the scheme.

Mr Carney says the discovery will help, as will examining the “black box” of government decision-making.

“It is very important to understand what went wrong in ministerial offices or within the bureaucracy, so that any future program is well designed and that these kinds of gross injustices never happen again”, a- he declared.

A series of senior officials are also expected to be called to testify.

It is also possible that some members of the former coalition government will be called to testify about the beginnings of the program.

A woman stands on the street
Deanna Amato says there are still questions to be answered. (ABC News: Paul Farrell)

Robodebt feels like an eternity for Ms. Amato. She recently had a baby girl.

She hopes the royal commission will provide the answers many Australians are still looking for.

“I’d love to see what everyone in those positions has to say about the whole plan and, you know, how some things were ignored at the time. It would be nice to see people respond from some of those decisions made,” she said.

And she can’t wait to one day tell the story to her daughter.

“It will just be nice to tell him what happened. And, as scary as it was, the fact that I stood up for this and moved on, I feel really proud. And I proud to tell him,” Ms Amato said.

Watch ABC 7:30 a.m.Monday to Thursday at 7:30 p.m. on ABC iview and ABC TV