This story contains reference to suicide
A shameful chapter in Australian history - that’s how the robodebt scheme has been described.
The scheme, implemented by the former Coalition government, aggressively pursued tens of thousands of Australians for debts they did not owe.
On Thursday, the Labor Government announced a royal commission that will examine its impact and determine who made key decisions that influenced the unlawful program.
Prime Minister Anthony Albanese and victims of the scheme say it's overdue, but the Coalition, now in Opposition, have labelled it a political witch hunt.
Here's everything you need to know about the robodebt scandal.
What is 'robodebt'?
For decades, the Australian Tax Office has used data matching systems to ensure that Australians are paying and receiving the correct amount of tax and benefits.
The previous computer system found some 300,000 discrepancies a year, but Services Australia only had the resources to investigate 20,000 of the highest risk cases - the rest were left unresolved.
Work on an automated system to crack down on discrepancies began development in 2011 under the then Gillard Government - but was never implemented.
In the 2015 budget, the then Abbott government announced it would pursue outstanding welfare debts and following the 2016 election, the Turnbull government implemented the Online Compliance Intervention (OCI) - a new automated scheme to chase down those debts.
An algorithm instead of a human would identify and pursue outstanding payments - capable of sending out 20,000 notices a week, instead of 20,000 a year.
The OCI, dubbed “robodebt”, led to hundreds of thousands of Australians being pursued and forced to pay outstanding debts.
When the scheme was scrapped in 2020, some 470,000 debts had been wrongly issued. The government said they would be repaid in full at a cost of $721 million.
Even those who had legitimate debts felt the way their cases had been pursued was aggressive and traumatic - with the onus of proof placed on customers, not the department.
Felicity de Somerville, the lead plaintiff of the class action against the scheme, still struggles with anxiety caused by her treatment under the scheme.
In 2017, $11,000 was withdrawn from her account without warning, leaving her unable to pay for medication for her sick daughter.
Felicity de Somerville with her daughter. Source: Supplied
“People lost marriages, they've gone bankrupt, they've lost their houses and some people have lost their lives.”
A senate committee heard mothers who sent handwritten letters attributing Robodebt as a factor in their son's suicides.
“If it were not for the Automotive Compliance Letter & the threat of a debt … my son would be sitting next to me today,” mother Kath Madgwick wrote.
“Instead he was extremely distressed & it pushed him to make an impulsive decision.”
Why has Labor called a royal commission?
There have been numerous investigations and inquiries into the scheme since its introduction, with the Commonwealth Ombudsman finding multiple issues with the scheme in 2017.
In 2020, the government agreed to settle a class action brought on by 400,000 victims - paying out a further $112 million in compensation on top of the existing repayments.
The Federal court had found the scheme was unlawful and there was no way for Centrelink to have been satisfied the debts were actually correct.
In June 2021, a settlement of $1.8 billion was approved by Justice Brendan Murphy who described the program as a “shameful chapter” in Australia’s social security scheme.
People lost marriages, they've gone bankrupt, they've lost their houses and some people have lost their lives.Robodebt victim Felicity de Somerville
But advocates say there are still questions to be answered about how the scheme could have been allowed to operate for that length of time.
“We're six years on from the start of robodebt. And still, there are no answers as to who's accountable for what's happened,” Edwina Macdonald, Acting CEO of the Australian Council of Social Service (ACOSS) told SBS News.
“We don't have answers for who knew what, when did they know it? Why did they decide not to act when they knew that this was unlawful?”
“And why did the former government continue with a program that they knew was causing such serious harm?”
Establishing a royal commission into robodebt was a key election promise for Labor.
Under the terms of reference, the inquiry will examine:
- The establishment, design and implementation of the scheme, including who was responsible
- The handling of concerns about the schemes
- The impact it had, including on vulnerable individuals and the ultimate cost to the commonwealth
- Measures to ensure such a scheme does not take place again.
The royal commission, led by Catherine Holmes AC SC, will be headquartered in Brisbane and deliver a final report in April 2023.
Who could be compelled to appear?
Royal commissions have the power to compel witnesses to testify and the frames of reference suggest that the actions of those in senior roles will be examined.
Former Liberal government ministers Scott Morrison, Marise Payne, Christian Porter, Alan Tudge and Stuart Robert were all involved in he drafting, implementation and eventual closure of the scheme from 2015 to 2019.
Former government services minister Stuart Robert. Source: AAP / MICK TSIKAS
Those impacted by the scheme will also be given a voice.
Ms de Somerville told SBS News she would like to share her story at the hearings.
“I feel like it's my duty to speak for so many Australians who either can't or won't speak for themselves.”
Readers seeking crisis support can contact Lifeline on 13 11 14, the Suicide Call Back Service on 1300 659 467 and Kids Helpline on 1800 55 1800 (for young people aged up to 25). More information and support with mental health is available at and on 1300 22 4636.
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