Robodebt cases dumped and debt written off under royal commission in controversial scheme

Nearly 200,000 outstanding “Robodebt” cases will be dumped and debts written off as the federal government tries to clear the last vestiges of the heavily criticized system.

Automated debt collection – colloquially referred to as “Robodebt” – is now the subject of a royal commission.

The use of computer algorithms to match welfare payments and income data from the Australian Taxation Office, with limited to no human oversight, resulted in thousands of Australians being wrongly pursued for debt.

That arrangement was suspended in 2019, and the former coalition agreed to a $1.2 billion price tag to settle a class action lawsuit brought against the Commonwealth.

Many people who were issued robodebts have described feeling chased for money while the scheme was operating, with some families saying it contributed to their loved one’s suicide.

Social Services Minister Amanda Rishworth announced that 197,000 outstanding robodebt cases would be closed, with the royal commission into the scheme already underway.

Before the scheme was suspended, 124,000 people had been told their debts were being reviewed, while a further 73,000 were not warned their debts were being reviewed.

The reviews were suspended when the scheme was put on hold in 2019.

“The robodebt fiasco is something that should be of great concern to all Australians,” Ms Rishworth said.

“It was intended to save money. However, we know it had a significant human cost.”

She said the warning signs were there for a long time and it was not fair to have the debt still hanging over people.

“We know that as recently as 2016 there were members of the public raising concerns that this debt was not real,” Ms Rishworth said.

“Individuals felt increasingly anxious, depressed and worried because these debts kept coming and they couldn’t understand them.”

Prime Minister Anthony Albanese pledged to set up a royal commission into the scheme during this year’s election campaign, and the inquiry held its first hearing at the end of September.

Further hearings focusing on how the Robodebt scheme came about are scheduled for the end of the month.

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