Robodebt faces legal challenge
A class action could be launched into the Federal Government’s ‘robodebt’ scheme.
Gordon Legal has proposed action alleging the federal government financially benefited through the robodebt scheme when it wrongfully collected money that legitimately belonged to recipients.
The lawyers say that the system puts debt collectors on to innocent people over unlawful debts, using a flawed algorithm to take money it is not owed.
They say this means the Commonwealth is engaging in unjust enrichment in the eyes of the law.
The class action will seek repayments with interest, a wiping of penalties, and damages for distress and lost reputation.
Former Labor leader Bill Shorten has been put forth as a kind of spokesperson for the legal action, as he is now shadow minister for government services.
He says the Government has pushed to maintain the scheme despite extensive outcry, because “they are hoping they can shake down people into paying up”.
“This is a government building their … position based on this faulty, immoral and quite possibly illegal scheme, but they should suspend it and rule out extending it to anyone else, and in fact they should revisit their own files and perhaps sit down and work out why this is wrong, and stop it,” he said.
Mr Shorten said the legal foundations of robodebt must be tested “because my own research in the last couple of months has led me to believe it is almost certainly illegal”.
“I just have to do research through the stories [the media has] covered to say there is a sickness at the heart of robodebt which needs to be cured.”
The Government has wiped the debts of some welfare recipients when they make big enough headlines, and Mr Shorten suggests this is to avoid having to prove the legal basis of the scheme.
This is just the latest sign of major concern with the scheme, coming after Victoria Legal Aid brought an action on behalf of Deanna Amato, and a former member of the administrative appeals tribunal (AAT) argued the robodebt scheme allowed enforcement of “illegal” debts.
The program was also slammed in an academic paper by Terry Carney that accused Centrelink of failing to defend the legality of debts in the AAT.
The lawyers say the high court may have to recognise legal principles that “break new ground”.