The government’s robodebt scheme has hit a “new low” with revelations that vulnerable Australians were increasingly targeted last year, despite warnings the scheme was illegal, the federal Opposition says.
According to documents released in answer to a Senate Estimates question on notice, the number of tax returns of Sickness Allowance and Disability Support Pension recipients garnishered due to a robodebt increased by 2000 per cent last financial year.
The figures showed that more than 11,000 disability support pensioners had paid back a robodebt in full since 2016, with the number increased by 230 per cent year-on-year in 2018-19.
Nearly $8 million was paid back by disability support pensioners through robodebt in 2018-19, up from $2.3 million in the year before.
Individuals on Sickness Allowance paid back $2.8 million in 2018-19, up from $1.6 million in 2017-18.
This targeting of vulnerable individuals took place while the legality of robodebt was being called into question. It was also recently revealed that the government itself had received advice that robodebts raised based on income averaging were “not lawful debts”.
Shadow government services minister Bill Shorten labelled the revelations a “new low” for the government and its handling of robodebt, saying the system had “gone into overdrive against vulnerable recipients”.
“This is not a helping hand for people in need. This is a new low for this government and its handling of social security,” Mr Shorten said.
“Robodebt is illegal. And what’s worse is the government has known it is while deploying it against the vulnerable,” he said
“It is time for Minister Stuart Robert to come clean with the public about what he knew and when, as well as revealing details of his scheme to repay innocent Australians.”
Recently released emails between high-level ATO officials revealed that the government had previously received legal advice that its robodebt scheme may be illegal.
The emails showed that the ATO was told by the Department of Social Services that debts raised through income averaging were “not lawful debts”.
The emails were sent in November, on the same day that the government announced a major overhaul of the scheme in the face of growing criticism and a class action lawsuit.
“In further discussion with DSS, it appears that what you need to raise is: they have advised you that they have received legal advice that debts based solely upon DSS own income averaging of ATO annual tax data are not lawful debts,” ATO general counsel Jonathan Todd wrote to ATO commissioner Chris Jordan in November.
“In view of that legal advice…it appears that robodebts are not debts due to the Commonwealth.”
The government has refused to release this legal advice or even confirm when it received it.
The government’s use of the potentially illegal robodebt scheme to target vulnerable Australians is “absolutely reprehensible”, senior lecturer at Deakin University Dr Monique Mann said.
“The system aims to recoup welfare spending in a way that is irrefutably unfair. It identified debts that don’t exist and debts that they’re not lawfully able to claim. That’s what the class action will be arguing,” Dr Mann told InnovationAus.
“The majority of welfare recipients live below the poverty line, and the program explicitly targeted vulnerable and marginalised members and the government continually proposed an expansion of the program to continually target them in various ways.
“The government here has not done its due diligence, and that’s consistent with its refusal to release the advice or information, and its approach and strategies in defending robodebt. This is intentional deception by the government and the department in relation to this very inhumane, unfair, unjust and punitive program.”
Late last year the federal government confirmed it would no longer be issuing robodebts based solely on the flaw income averaging method, with a review to be conducted into debts already raised this way.
A class action lawsuit is set to be launched against the scheme, with the Federal Court also recently ruling that it was illegal.
The Coalition revealed further changes to its welfare spending crackdown earlier this year, with recipients to report their income after actually being paid, instead of while they were earning it.
The new system would involve an online platform where welfare recipients report their earnings, with data automatically uploaded from the ATO.
While robodebt appears to have been scaled back, scrutiny should still be applied to the government’s efforts to claw cash back from welfare recipients, Dr Mann said.
“There are going to be massive consequences in terms of the government reassessing debts, but I think we have to be a bit cautious about what’s coming next. We have to be mindful of the consequences in terms of enhanced data collecting and matching,” she said.
“I don’t think the government will let this one slide, and they will improve their systems. I don’t think robodebt being illegal is the end of this, as the government is attempting to regulate and punish welfare recipients.”