Government admits robodebt was illegal as it settles legal challenge | Centrelink debt collection


Federal government settled landmark challenge to robodebt program – conceding $ 2,500 debt raised against Deanna Amato was not legal because it was based on income averaging.

In the orders done by consent on Wednesday, the Federal Court declared that the debt was “not validly incurred”, that an order to garnish Amato’s tax return was also invalid and that there was no reason to add a 10% debt penalty.

Rowan McRae, executive director of access to civil justice at Victorian Legal Aid, said the case has “helped clarify the illegality of the robodebt system for hundreds of thousands of Australians in the same situation, who have received or paid a robodebt on the sole basis of average ”.

Last week the federal government abandonment of the exclusive use of income averaging to calculate debts, dismantling a central board of the automation of the robodebt program which saw tens of thousands of social assistance recipients overcharged for alleged debts.

Wellness groups, legal centers, Senate inquiries and one former senior administrative appeals tribunal member Terry Carney all warned that income averaging is not an appropriate basis for claiming debt.

The same argument is made in a class action lawsuit by Gordon Legal challenging the legality of the entire program.

Amato, a 34-year-old local government worker, discovered Centrelink claimed she was in debt in January after sending repeated notices to an old address, then seized her $ 1,700 tax refund.

Amato challenged the debt in federal court, prompting the Commonwealth to reduce debt to $ 1.48 in September, but the case continued even after the radical overhaul of the system announced by Minister of Government Services Stuart Robert.

In a statement explaining the consent orders, the court noted that the original debt of $ 2,900 was calculated based on Australian Tax Office income data averaged over two-week periods as if it were of Amato’s actual income during each period.

The court said the finding that Amato had received social security benefits to which she was not entitled was “not open to the material submitted to the decision maker” as there was “no evidence” indicating that the average reflected Amato’s actual income.

“In the circumstances, there was nothing before the decision maker capable of supporting the conclusion that a debt had arisen… The conclusion that a debt arose was therefore irrational, in the legal sense required.”

The court ordered the Commonwealth to pay Amato’s fees and $ 92 in interest.

Amato said she was thrilled with the “incredible” news. “You may feel so small and helpless next to the government, but I am so happy that the unjust and ultimately illegal aspects of this system have been brought to light,” she said in a statement.

“I have been reimbursed for my money, but I hope that others who have paid off bad debts will also have a way to get their money back.

“I feel a weight come off my shoulders. I have proven my innocence, but I have also proven that there are reasons why you need all the facts before you can demand debt payments from people.

McRae said that while last week’s changes are “significant” they came “too late for many people who have experienced hardships and hardships, or who have already paid for robodettes through foreclosure. – tax stop and debt collectors ”.

“Today’s result shows that the federal government has accepted what advocates have been saying for years – using only income averaging to increase debt is both inaccurate and inconsistent with Social Security law. “

Shadow Attorney General Mark Dreyfus said the judgment “simply confirms that we have a Commonwealth government that has extorted money from Australian citizens for no reason to do so.”

“This is an extraordinary scandal, robodebt,” he told the ABC. “I just think the Prime Minister owes the Australian people an apology for this extraordinary program.”

On Wednesday, the Senate passed a motion ordering the government to produce a legal opinion explaining why it made the changes to the system, with Greens Senator Rachel Siewert demanding to know “the legal status of this program”.

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