Unemployed Australians who say they were wrongly targeted by an automated debt recovery scheme will launch a class action against the government, their lawyer announced Tuesday, as Canberra ramps up pressure on welfare recipients.
The case — which claims the controversial system unlawfully took money from job seekers as well as pensioners, students and carers — will demand the government pay restitution and damages.
The so-called “robodebt” scheme uses an algorithm to compare tax returns with welfare payments, with the onus placed on income support recipients to prove they do not owe the amount demanded.
Advocates and welfare recipients say many have been relentlessly hounded by debt collectors to pay thousands of dollars they did not owe.
Lawyer Peter Gordon, who is leading the class action, estimated up to Aus$300 million ($200 million) had been “illegally” collected from those “least able to afford” it since the scheme’s launch in mid-2016.
“The unfair and incorrect assumptions had a devastating financial impact on people’s lives,” said Gordon.
“The emotional distress for people who have done nothing wrong has been high.”
Robodebt is one of a raft of measures pushed by Australia’s conservative government in recent years targeting the alleged misuse of welfare.
It is currently seeking to introduce drug testing of young job seekers and trialling cashless debit cards that restrict money being spent on alcohol, gambling or withdrawn in cash.
About 500,000 debt notices had been issued as of March this year, almost 100,000 of which were reduced, waived or written off — some of which had been sent erroneously while in other cases the intended recipients had died.
Several individuals are already battling their alleged debts in court, including a local government employee who had her entire tax return of about $2,700 recouped without her knowledge, according to Victoria Legal Aid.
“I was so shocked that they had the ability to access my tax return to take money but not to actually check if the debt was real,” she said in a statement.
Government Services Minister Stuart Robert told parliament Tuesday he had faith in the robodebt system and criticised the case’s backers, who include the opposition Labor Party, for announcing it before making a court filing.
“There is no court case, there’s no case, there’s no papers, there’s no (plaintiffs),” ABC reported him as saying.
Gordon is a high-profile class action lawyer who has previously taken on the Catholic Church and Big Tobacco, as well as acting on behalf of asbestos victims.