The Department of Human Services has for the second time wiped the debt at the centre of a legal challenge to the controversial robodebt scheme, the federal court has heard, The Guardian reports.
But the challenge will go to trial in December after lawyers for the commonwealth told the court they were happy for the case to go ahead.
Brought by Victoria Legal Aid on behalf of Deanna Amato, 33, the case is an attempt to test the legality of the robodebt scheme, which has faced sustained criticism and is the subject of two Senate inquiries.
Amato had her $1,700 tax return garnisheed over the alleged $2,754 robodebt, but the court heard on Friday that the Department of Human Services had recalculated the debt to an “amount below two dollars”.
The commonwealth subsequently repaid the money to Amato but is refusing to pay interest.
“I’m happy that I don’t have a big debt looming over me anymore but, on the other hand, I’m stunned that it was recalculated so easily after I took legal action,” Amato said after Friday’s hearing.
Legal Aid brought the case on behalf of Amato after the department wiped the $4,000 debt owed by a Melbourne nurse, Madeleine Masterton, before arguing the case should no longer proceed.
The non-existence of a debt allows the department to argue there is no “utility” in the case, as it did in the Masterton challenge.
However, the commonwealth’s lawyer, Nicholas Owens SC, told the court that the commonwealth supported the case going ahead. He said there was an existing dispute about Amato’s demand that the commonwealth pay her interest on the money it had returned to her, which it was opposed to.