Centrelink’s automated debt recovery program is being reworked after years of disputes that the system was fundamentally flawed.
An internal email, seen by the ABC and The Guardian, told Department of Human Services staff that the program was being reviewed.
"The department has made the decision to require additional proof when using income averaging to identity over payments," the email said.
"This means the department will no longer raise a debt where the only information we are relying on is our own averaging of Australia Taxation Office income data."
The robodebt scheme was designed to recover debt the government believed had been accrued by welfare recipients.
An algorithm was put in place that matched Centrelink data with ATO records, averaging a person’s reported taxable income out over a 12-month period.
If the system detected a discrepancy between the welfare recipient’s averaged taxable income and the income they reported to Centrelink, it would automatically issue a debt recovery notice to the person.
CEO of the Australian Council of Social Service, Cassandra Goldie, said she the program has been “grossly unfair”.
“While we’re relieved to hear that the Government is finally halting the use of averaging to calculate debts, we call on the Government to replace the entire error-ridden program with a humane form of debt recovery,” Goldie said.
“Robodebts hit people even when they’re at their most vulnerable. After the death of a family member, in the wake of a natural disaster, when they’re living on next to nothing and have been getting rejection after rejection in today’s competitive job market.
“Robodebt is an abuse of government power, and it should have never seen the light of day.”
Robodebt notices have reportedly contributed to suicides. Debts have even been raised against dead people, with debt collectors pressuring surviving family members to pay up.
A Melbourne-based law firm announced in September that it would bring a class action lawsuit against the government over the scheme.
In a press conference on Tuesday afternoon, Minister for Government Services, Stuart Robert, said the scheme was not wholly being abandoned.
“We will still reach out to Australians to say that income averaging indicate that they may possibly have a debt, and we'll use other proof points as well, and we will ask them to engage with the department to identify through bank statements or through pay slips or other means, that indeed, they don't have a debt,” Robert said.
“We do not stand back from ensuring the legal obligations, that the right people get the right money. And in so, ensuring that people who have been overpaid, repay that debt.”
