In late November 2019 Gordon Legal filed the Robodebt Class Action with the Federal Court of Australia. The essence of the Robodebt Class Action is that the Robodebt system is unlawful.
The Robodebt Class Action argues that it is unlawful for Centrelink to pursue recipients for debts that they have calculated by the averaging system. The averaging system involves Centrelink applying an average of that recipient’s annual ATO PAYG data – and ignoring the fact that the recipient did not earn a consistent amount every fortnight when they were receiving benefits.
The Robodebt Class Action intends to compensate all of those people whose debts have been raised wholly or in part by the averaging system. It also intends to compensate those people for the distress and inconvenience that they suffered as a consequence of the Robodebt System.
If you were asked to provide payslips for a certain period, and you did not provide them, or any other information, it is likely that all of your debt was calculated by the averaging system.
Alternatively, if Centrelink asked you to provide payslips for a certain period, and you could only provide them for some of the relevant time, it is likely that part of your debt was calculated by the averaging system.
It is also possible that notwithstanding that you provided payslips or banking records covering all of the period you received Centrelink benefits, averaging was still used to some extent as the basis of Centrelink’s decision to issue a Robodebt notice to you, requiring that you repay money to it.
How can I pursue my claim to be compensated for Centrelink’s breach of its obligations to me?
You may be aware that the so-called Robodebt issue has been widely reported in the media and has been the subject of both a Parliamentary Inquiry and a report from the Commonwealth Ombudsman. Unfortunately, the Commonwealth Government does not appear to accept that it should repay the money it has collected from people where it has used averaging to calculate the amounts it considers are owed to it.
Unless Centrelink provides a satisfactory response to the claims made in the proceeding, instituted by five representative applicants, who are bringing the claim on their own behalf and on behalf of all group members, we will ask the Federal Court to determine the claims as soon as possible.
People with a claim of the kind broadly described above should pursue their rights by participating in the Class Action.
If you have received a demand for payment under the Robodebt System and you paid money to Centrelink or had money taken from your Centrelink benefits, tax return or wages, you are invited to Register your interest.
What is the Robodebt Class Action about?
The Robodebt Class Action argues that the Commonwealth Government has taken money from Centrelink recipients unjustly and/or in breach of its duty of care. The Court is asked to determine whether the more than 700,000 debts raised by Centrelink after 1 July 2015 lawfully entitle it to recover the amounts claimed. The Court has also been asked to determine whether the so-called collection fees levied by Centrelink should be refunded and whether those who have repaid all or part of those amounts should be paid interest. Finally, the Court has been asked to determine whether the persons affected are entitled to compensation for any distress or inconvenience caused.
What has Centrelink done to change the Robodebt System?
On Friday 15 November Gordon Legal wrote to Centrelink notifying it that the Robodebt class action was about to be commenced. Our letter set out the basis of the claim and asked the Commonwealth to respond.
On Monday 18 November 2019, Centrelink responded by informing Centrelink staff that from now on, it will no longer raise debts where the only information it is relying on is averaging of ATO income data. Centrelink also told its staff that it will require additional proof when using income averaging to identify alleged overpayments before raising a debt. Centrelink has also advised its staff that it will be reviewing past debts raised through the Robodebt System. It is unclear what action Centrelink proposes to take as a result of the review or when the review will occur, or whether this will lead to persons who have had unlawful debts raised against them being identified and compensated.
In our view, the changes announced by Centrelink on 18 November 2019 contain a number of important concessions. It now appears that Centrelink acknowledges, at least in some way, that:
- averages calculated from annual ATO data are not a substitute for calculating actual fortnightly earnings; and
- the onus should be on Centrelink to establish that a debt is owed, rather than recipients of welfare payments being required to prove that they were entitled to receive the benefits paid to them.
Centrelink has therefore belatedly decided to freeze the Robodebt System as it currently operates.
Why the Class Action is Proceeding?
At this stage the Robodebt Class Action needs to proceed because there are a number of issues which Centrelink has not yet addressed, including the following:
- Will Centrelink immediately return the money it has taken from our clients and others affected by the unlawful Robodebt System;
- Will Centrelink immediately withdraw the many thousands of debt notices it has disseminated throughout the Australian community that had no proper basis to be issued;
- Will Centrelink immediately confirm that it will compensate those impacted by the application of the Robodebt System for the loss, distress and inconvenience caused to them; and
- Will Centrelink pay interest on the money taken unlawfully from people, including through garnishing their tax returns?
How do I know whether I am part of the Robodebt class action?
You are a group member of the Robodebt class action if you meet the 3-point definition set out below.
- You were or are receiving one of the following Social Security Payments:
- Newstart Allowance;
- Youth Allowance;
- Disability Support Pension;
- Austudy Allowance;
- Age Pension;
- Carer Payment;
- Parenting Payment;
- Partner Allowance;
- Sickness Allowance;
- Special Benefit;
- Widow A Allowance; and
- Widow B Allowance.
- At any time in or after April 2015:
- You were sent Centrelink correspondence which requested that you check, confirm or update your employment information for a period of time when you were receiving payments; and
- Following this initial correspondence, Centrelink asserted that you had been overpaid Social Security payments and demanded repayment of an alleged debt; and
- The alleged debt was raised all or in part by the ‘Robodebt System’ – meaning that Centrelink calculated the debt by averaging out your annual ATO PAYG income data and ignoring the amounts you actually earned at that time.
- You have paid, or had recovered from you, any debt or part thereof (including through a payment plan, garnishing of tax return or payment of the debt in full).
Where are the Court documents?
A copy of the Originating Process and Statement of Claim filed with the Court on 19 November 2019 and served on the Commonwealth on 20 November 2019 are available here:
Originating Process Document
Statement of Claim Document
What do I need to do now?
If you would like to register your interest in the class action, please click here.
If you would like to read the current most Frequently Asked Questions with regard to the Robodebt Class Action please click here.