Unraveling Robodebt: Legal Failures, Impact on Vulnerable Communities and Future Reforms

13 December 2023
Professor Emeritus Terry Carney unpacks the Robodebt scheme
The Albanese government has agreed in full or in principle to 56 recommendations of the robodebt royal commission, we spoke to Professor Emeritus Terry Carney about the scheme and what these recommendations mean.

Can you provide a brief overview of the robodebt scheme and its implementation in Australia?

Robodebt is by far the Australian government’s most catastrophic policy failure in its history. A failure not only of government administration and Ministerial standards of governance, but also a complete breakdown of all the accountability checks and balances – failures by the Ombudsman, “gaming” by the government of administrative and judicial review, and other oversight bodies.

The cavalier adoption of digitisation for debt recovery between 2014 and 2019 without regard to legality, resulted in the raising of 794,000 false and unlawful debts were raised against approximately 526,000 recipients at a staggering cost to revenue of AUD $1.751 billion.

From a legal perspective, what are the key issues or concerns that were raised by the robodebt scheme?

The key legal concerns with Robodebt were:

  • that it was completely without any legal foundation and in the face of the advice of its illegality,
  • was administered in flagrant breach of ethical obligations for government to act as a “model litigant” (including ignoring and failing to appeal 220 tribunal findings of illegality) and
  • was laughably mathematically illiterate—presuming that social security clients had stable fortnight by fortnight casual earnings when Departmental data knew this to be the case for only 7%; and by absurdly assuming that Tax office data about 6 or 12 months of aggregate earnings could be turned into a fortnightly average of the “actual” fortnight by fortnight earnings required in order to determine if any overpayment arose for particular fortnights.
  • a result that over the life of Robodebt was a clear breach of the rule of law.

How has the legal landscape responded to the robodebt scheme, and have there been any notable legal challenges or cases associated with it?

Two test cases in the Federal Court were required before Robodebt was ruled invalid, because the Government deliberately “gamed” the first challenge by “expunging” the alleged debt in May 2019 just as the Masterson case lodged in February was coming on for hearing (meaning there was no longer a live issue and thus no ongoing case) and nearly achieved the same result with the second case of Amato v The Commonwealth of Australia in November 2019 (which went to hearing after zeroing the debt but only because it would not agree to pay interest on the monies already collected and required to be repaid).

The Government also “gamed” the Administrative Appeals Tribunal (‘AAT’) by never appealing to the second tier “General Division” any of the 220 rulings invalidating Robodebt at the first level of the Tribunal (where hearings are in camera) because doing so would have made public the rulings of invalidity, jeopardising the continuation of the scheme. Nor did the government inform all AAT members of those rulings, mention them in future cases or otherwise discharge its “model litigant” duties.

Professor Terry Carney

Professor Terry Carney

In your view, what were the implications of the robodebt scheme on individuals and vulnerable communities, particularly in terms of access to justice and fairness?

The most profound revelation from the combination of the finding of how many unlawful Robodebts were raised and the work of the Royal Commission in ascertaining how many of those debts were challenged in the AAT is that it dealt with just 0.05% (5 in 10,000) of those false and illegal debts.

  • Social security recipients are one of the most vulnerable and stigmatised groups of citizens in the country (with high rates of poverty, disadvantage, mental illness and disabilities etc) a finding eloquently highlighted in a key chapter of the Robodebt Royal Commission Report.
  • Given that Robodebts involved significant sums of money, entailed adverse credit rating risks and jeopardised admission to practice in professions such as law, and in at least some instances led people to suicide as found by the Royal Commission, that only 5 in 10,000 managed to obtain access to justice is an appalling outcome.

From a policy perspective, what will the 56 proposed changes from the Royal Commission into robodebt achieve?

The 13 November decision of Government to accept in full 49 of the 57 recommendations of the Royal Commission, with all except one of the remainders accepted in principle (Australia 2023), will in my opinion guarantee that another Robodebt cannot occur in future.

The exception was not altering the ability for documents to be exempted from freedom of information disclosure by falsely being classified as a ‘cabinet document’ when this was not the case.

While the failure to adopt or further consider this recommendation is regrettable because it leaves it open for government to “game” freedom of information law, this does not detract at all from my reassurance about there not being any likelihood of a repetition of a Robodebt scandal not quickly being brought to account.

The access to justice challenge of the shockingly low statistic of just 5 in every 10,000 managing to have their ‘day in court’, and the legacy of Australia’s appalling political and public culture of stigmatising vulnerable social security recipients are however two major legal and social policy challenges for researchers, public figures and all Australians to find ways of overcoming.

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