The federal government has privately admitted it will be forced to refund more than 400,000 welfare debts worth about $550m that were wrongly issued to hundreds of thousands of Australians under the botched robodebt scheme, the Guardian reports.
Confidential government advice seen by the Guardian reveals for the first time the scope, size and impact on the vulnerable of the years-long robodebt debacle, including that the government expects to lose an upcoming class action against the income compliance program and intends to settle.
Facing a class action from Gordon Legal and calls from Labor and the Greens to immediately refund debts calculated using the unlawful “income averaging” method, the government has publicly declined to detail its next course of action, saying only that it has refined the program in response to “feedback”.
But a leaked ministerial submission to cabinet from government ministers Stuart Robert, Anne Ruston and Christian Porter, prepared last month, reveals the commonwealth expects to refund more than 400,000 debts over the next 12 months.
“Services Australia estimates that it will administer 449,500 refunds determined under the programme, and their associated repaid debts would be refunded commencing in July 2020 and concluding within 12 months,” it says.
The submission says Services Australia estimates that “$555.6m in cash payments have been received from recipients to date for those in-scope debts”.
About 80,000 debts would be reassessed before “refunding or reaffirming the debt”, the submission says.
It is understood that the expenditure review committee of cabinet agreed last month to instruct the commonwealth’s legal representatives to begin settlement negotiations on the basis that it is prepared to refund invalidly raised debts.
But they were also instructed to first oppose paying interest on the debt refunds, demand Gordon Legal withdraw its negligence claims, and would reconsider if the proposal was unsuccessful.