Victim of bungled robodebt scheme says she’s ‘furious’ with the government’s response to $1.2 billion settlement
A lead plaintiff in the settlement between robot debt victims and the federal government has blasted its response to the case as inadequate. Justice Bernard Murphy on Friday approved a $1.2 billion settlement between robot debt victims and the national.
Government criticizes the scheme for being a “shameful chapter” in public administration. Regarding the settlement outcome, Treasurer Josh Frydenberg said the issue has been resolved. There was a settlement. We have said we have apologized. The Prime Minister has said that himself for the harm, the hurt, the hardship that the administration of the scheme has caused,” Mr. Frydenberg said.
He said previous governments were also responsible for the robodebt policy.
“It is challenging when it comes to recovering debts. But it is a process that successive governments have adopted, and obviously, we accept the settlement announced by the court today.”
Lead plaintiff Felicity de Somerville said Mr. Frydenberg’s response was insufficient.
“I’m furious with the Treasurer and his comments today. I come from a profession [nursing] where our pillars of what we do are integrity and accountability, and if this were to happen in my field of work, there’d be complete public uproar,” she told SBS News. “You have to take accountability for what you do, and the government knew what they were doing. They knew what they were doing was not ethical.”
In 2017, Ms de Somerville realized Centrelink had taken the equivalent of six months’ wages out of her account without warning when she tried to pay for her one-year-old daughter’s medication for a bad chest infection.
She said pursuing the legal case only increased her debt, but she is still happy with the outcome for victims who could not advocate for their situation.
“We had analysts from Gordon Legal and the government recalculating people’s debts. My debts increased. Financially this hasn’t helped me; it’s burdened me.
“But I’m still really happy with the outcome because John Smith in Spring Vale, who’s on disability, who didn’t know how to navigate the system and didn’t have a voice, they’ll be compensated. It’s not about me.”
On Friday, Justice Bernard Murphy said using flawed income averaging tools to raise debts caused financial hardship, distress, and anxiety to vulnerable people. He said many felt shame and hurt at being wrongly branded “welfare cheats”, with some driven to take their own lives.
The settlement distribution scheme had also resulted in a “huge waste of public money”.
“The proceeding has exposed a shameful chapter in the administration of the Commonwealth social security system and a massive failure of public administration,” Justice Murphy told the Federal Court.
He said it should have been “obvious” to the government that many welfare recipients do not earn a stable or constant income and may only be employed part-time, casually, or intermittently.
However, Justice Murphy was not convinced the federal government knew the robodebt scheme was unlawful. “I am reminded of the aphorism that, given a choice between a stuff-up and a conspiracy, one should usually choose a stuff-up,” he said.
Gordon Legal led the 648,000-strong class action.
Justice Murphy approved $8.4 million in costs to the firm and said the 680 people who objected to the settlement would be allowed to opt-out.
Gordon Legal partner Andrew Grech said the settlement approval would bring closure to the victims of the robodebt scheme. “We hope this outcome brings peace of mind and some certainty to all class action members and acts as a strong deterrent against similar callous welfare practices for both present and future governments,” Mr. Grech said. The automated matching of tax and Centrelink data to raise debts against welfare recipients the government claimed to have overpaid was ruled unlawful in 2019.
The Commonwealth subsequently settled the case without admitting legal liability.
Lead plaintiff Felicity de Somerville said the response from Mr. Frydenberg was inadequate. “I’m furious with the Treasurer and his comments today. I come from a profession [nursing] where our pillars of what we do are integrity and accountability, and if this were to happen in my field of work, there’d be complete public uproar,” she told SBS News. “You have to take accountability for what you do, and the government knew what they were doing. They knew what they were doing was not ethical.”
She said pursuing the legal case only increased her debt, but she is still happy with the outcome for victims who could not advocate for their situation. “We had analysts from Gordon Legal and the government recalculating people’s debts. My debts increased. Financially this hasn’t helped me; it’s burdened me.
