Robodebt warning revealed
New documents reveal the Federal Government was told some ‘robodebts’ are illegal on the same day it suspended the scheme.
The controversial data-matching ‘robodebt’ scheme has been under fire since it emerged that thousands of incorrect debt letters were being sent to marginal Australians, asking them to pay back amounts that they did not owe.
On November 19 last year, the Morrison Government announced the robodebt program would be renovated, abandoning the sole reliance on an “income-averaging” method and instead requiring additional proof before raising alleged debts.
It has now been revealed that Australian Taxation Office general counsel Jonathan Todd emailed ATO commissioner, Chris Jordan, on exactly the same day, warning that “debts based solely upon DSS [Department of Social Services] own income averaging of ATO annual tax data are not lawful debts (‘robodebts’)”.
“They have also suspended the raising and recovery of robodebts as of today.”
Mr Todd told Mr Jordan that “in view of that legal advice … it appears that ‘robodebts’ are not debts due to the Commonwealth”.
It is not clear when the government received the advice for itself.
The ATO was asked to garnishee tax refunds to recoup the alleged debts because the debts were partly identified using welfare recipients’ tax returns.
Mr Todd told Mr Jordan he was “not in a position to garnish robodebts when served a notice under s 1233 of the Social Security Act, as the notice would not be in respect of a valid legal debt”.
Government services minister Stuart Robert has not spoken about the apparent illegality of the scheme, instead reiterating his claim that the overhaul would involve “refinements” to make the program more “robust”.
Mr Roberts’ department, Services Australia, is “carefully and methodically working to identify those customers whose debts may have been calculated using [averaged] income data”, he said.
“It’s not appropriate to pre-empt the outcome of this process and we’ll advise the House in the future when that process comes to its conclusion.”
With a class action into the debt process now underway, Shadow Minister for Government Services, Bill Shorten said the government's position is untenable.
“The Federal Government has been illegally, unjustly enriching itself, saying; ‘We're the government so we're allowed to get money back’ - they don't have the power to do it,” he said.
“So the fact that they're still running a legal action when their own public servants have already privately said it is not legal.
“This is a waste of money, the interest bill is ticking over, because if you owe someone money that you have taken, you owe them the interest on that lost income, they're paying lawyers to fight it, they shouldn't have taken the taxpayers money, they're spending more taxpayers money to get it, and now they're spending more taxpayers money to justify their mistake.”