Robodebts scrapped: Government announces it will repay $721M

More than 370,000 Australians affected by the government’s controversial robodebt scheme are set to receive a refund, Minister for Human Services Stuart Robert confirmed on Friday. It comes after Services Australia identified 470,000 individual debts to be waived, totalling more than $721 million, with refunds scheduled to roll out from July 1.

The shock announcement follows the government’s decision in November last year to no longer rely solely on averaging of Australian Tax Data (ATO) data to slap welfare recipients with debts, instead requiring additional proof to do so.

At the time it was also confirmed that a review into all robodebts that used averaging alone would be carried out.

“From July this year, Services Australia will refund all repayments made on debts raised wholly or partially using income averaging of ATO data,” Robert said in a statement published on Friday. “Refunds will also be made for any interest charges and/or recovery fees paid on related debts.”

Robodebt – aka the Income Compliance Program – refers to an averaging process used to calculate debts owed by welfare recipients. It worked by matching averaged data from the ATO with income reported to Centrelink. However the scheme came under heavy fire, with critics arguing that it did not work and was sending out automated demands for money from people who did not actually owe the government.

Stuart added: “Services Australia will now put in place the mechanisms needed to start making refunds, including how affected customers are advised of next steps. Consultation will occur with stakeholders, including the Commonwealth Ombudsman, and clear communication is a priority, so people understand what it means for them.

“It is important to note all other income compliance debts will continue to be subject to recovery, ensuring the integrity of Australia’s welfare system.”