Class action to target government over ‘robotdebt’ scheme

Centrelink’s controversial ‘robodebt’ scheme will be the subject of a class action led by law firm Gordon Legal with the support of the Labor Party.

The scheme — formally known as the Online Compliance Initiative (OCI) — involves automatically generated letters being sent to former and current welfare recipients demanding that they prove they were not overpaid by Centrelink.

The data-matching program takes Australian Taxation Office (ATO) income records and matches them with Centrelink clients. Centrelink’s algorithm assumes that the ATO-reported annual income of an individual was earned at an equal rate throughout the year, leading to letters being sent asking highlighting a possible debt being owed to Centrelink even in cases where there is no conflict between the data sets.

A 2017 report from a Senate inquiry called for the system’s suspension.

“Throughout this inquiry, the committee heard many personal accounts of the stress and distress the automated debt recovery system has caused recipients,” the report stated. The OCI system involved a “fundamental lack of procedural fairness” that was “evident in every stage,” the report said.

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