How the Robo-debt Scheme targeted the vulnerable

The Coronavirus lockdown has led to full-time workers living off Centrelink benefits for the first time in their lives. But what you may not know is that Centrelink was asked to pay back over 500 million dollars to welfare recipients, four months ago.

Nearly 400,000 people are owed money by the government. Among these people are low-income earners, pensioners and carers of disabled people.

Approximately half of recipients on Newstart Allowance, now called JobSeeker, are over 65-years-old. They’re the vulnerable members of our society, and like many full-time workers today, are in need of government support. But over the years, recipients have spent longer on the payment, and longer out of work.

The government used an inaccurate system to detect when people weren’t reporting their earnings correctly. While the data-matching method has been used for decades, it was only in 2016, with the assimilation of welfare recipients onto MyGov, that Centrelink could request old payslips, some dating back seven years. Without all the payslips, recipients would be handed a debt, some in the tens of thousands.

The system is known as the Robo-debt scheme.

In 2019, Gordan Legal filed a class action against the Commonwealth of Australia. After a battle in the federal courts, the Commonwealth conceded that the scheme was unlawful and agreed to pay back recipients.

But welfare recipients are still fighting for compensation. They were often given robo-debts with little notice, or reason.

Some people may not recover from the financial and emotional hardship that robo-debt created, and some cannot, because they’ve taken their own lives.

A Monash University study found that nearly 1 in 2 Newstart recipients will experience mental or behavioural problems. Stress created by a large debt could only further impinge on their ability to seek out work.

In low socio-economic areas, recipients may not be able to access mental health services and other essentials, because of the financial burden of a robo-debt. According to evidence from the Department of Social Services (DSS), the lowest populated states, Tasmania and the Northern Territory also hold the highest per centage of Newstart recipients.

In a senate inquiry, DSS acknowledged that while vulnerable people weren’t targeted by the scheme, they also weren’t excluded.