Robodebt class action to go ahead despite overhaul of Centrelink debt recovery

Paul Karp
Photograph: Alex Murray/AAP

Lawyers engaged in two court challenges against the legality of the robodebt program have confirmed that the government’s major overhaul will not stop the cases, with the class action championed by Labor officially launched on Wednesday.

According to Victoria Legal Aid, Deanna Amato’s federal court case, which is due to be heard on 2 December, will continue to seek a declaration the debt raised against her is unlawful despite the government’s announcement it will no longer rely solely on income-averaging to determine debts.

Labor’s government services spokesman, Bill Shorten, has confirmed that a separate class action will also continue to argue that the government has been “unjustly enriching itself at the expense of social security recipients”.

Related: Robodebt: government abandons key part of debt recovery scheme in major overhaul

At a press conference in Melbourne with the Gordon Legal senior partner Peter Gordon, Shorten revealed that writs had been lodged in the class action on Wednesday with 4,000 plaintiffs taking part.

Shorten described the case as “a drastic but unfortunately necessary move for the victims of robodebt – Australians who have been hit with harsh, inaccurate and almost certainly illegal debt claims from the government”.

He described the changes to the program as “a very late admission there is something rotten at the core of robodebt”.

At the National Press Club on Wednesday the attorney general, Christian Porter, noted the class action and the federal court case but refused to release government legal advice about the robodebt program.

“You could imagine that any government … seeks advice on those individual matters, and that’s fed in, obviously, to decision-making in the Department of Human Services and in the minister’s office,” he said.

The government services minister, Stuart Robert, has played down the significance of the changes – which remove the central plank of automation by requiring more information before claiming a debt – insisting that only a “small cohort” of robodebts are affected.

But Department of Human Services staff believe about 600,000 robodebts have been raised using income averaging and will need to be reassessed.

Departmental officials told Senate estimates in 2018 that information on the number of debts raised with income averaging is “not readily available”.

The script for compliance workers fielding incoming calls about the changes, seen by Guardian Australia, states that the department will conduct a review without the welfare recipient needing to “do anything” and only those “affected” will then be contacted.

If a person insists that their debt was calculated with income averaging and demands a refund, compliance workers are to suggest that the person “could locate payslips or bank statements to prepare for the reassessment”.

DHS staff are concerned the department has sent contradictory messages about the changes and the script fails to inform welfare recipients that everybody is entitled to a review.

An internal email to the compliance division states the department will no longer raise debts “where the only information we are relying on is our own averaging of [Australian Taxation Office] income data”.

It commits to “work through previous debts” with a “focus on debts where the person did not respond to our requests for clarification”.

Related: Single mother's $50,000 welfare debt wiped as tribunal rules Centrelink wrong

But DHS’s media team told Guardian Australia the refinement “is limited to those who did not respond at all to requests for the clarification of discrepancies”.

The discrepancies raise the prospect that only people who refused to engage with the department or supply further information will have their debts reviewed – while others subject to income-averaging who supplied other information will miss out.

Joel Townsend, the program manager of economic and social rights at Victoria Legal Aid, told Guardian Australia that Amato’s case is “seeking a declaration that the decision to raise a debt was unlawful”.

“We’re certainly pleased with the department’s decision – ceasing to use averaging makes the system fairer and more likely to be compliant with the law,” he said.

But the department’s intention to review debts already raised “doesn’t affect the question of whether the debt raised against Amato was lawful”.

Townsend said that Centrelink’s decision to impose a fee for failure to pay an alleged debt and to garnish tax returns are separate processes in social security legislation that will be challenged by the case.