Government’s $721 million payday to welfare recipients

Hundreds of thousands of Australians will secure robodebt refunds from the Morrison Government in July after it finally ran up the white flag on the botched welfare compliance scheme.

The decision will deliver a $721 million payday to welfare recipients who in some cases were hounded for years over the debts that were wrongly issued.

The huge refund of cash will also involve paying interest to thousands of Australians who were forced to repay debts before joining a class action against the Commonwealth.

In a statement, Human Services Minister Stuart Robert said the Morrison Government “takes its responsibility for upholding the integrity of Australia’s welfare system seriously”.

“From July this year, Services Australia will refund all repayments made on debts raised wholly or partially using income averaging of ATO data. Refunds will also be made for any interest charges and/or recovery fees paid on related debts,” he said.

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“Services Australia has identified 470,000 debts raised wholly or partially using income averaging of ATO data. Refunding of eligible debts will commence in July and will continue through the 2020-21 financial year. The total value of refunds including fees and charges is estimated at $721 million.

“Services Australia will now put in place the mechanisms needed to start making refunds, including how affected customers are advised of next steps. Consultation will occur with stakeholders, including the Commonwealth Ombudsman, and clear communication is a priority, so people understand what it means for them.”

The Morrison Government stressed that all other income compliance debts would continue to be subject to recovery, ensuring the integrity of Australia’s welfare system.

“People do not need to do anything right now to obtain a refund for a debt raised wholly or partially using averaging of ATO data. Further information will be available shortly at Anyone with questions about their income compliance review can call 1800 061 838,” he said.

Labor’s human services spokesman Bill Shorten said it was appalling that the Morrison Government had to be dragged to the humiliating backflip by the courts.

“Only when confronted with the prospect of 470,000 quiet Australians getting their day in court has this Government embarked on a backflip for the ages,” Mr Shorten said.

“They have been dragged kicking and screaming to do the right thing by the Australians they ripped off.”

In a statement, the law firm acting for hundreds of Australians with robodebts said the payout was the first step and they could claim for damages.

“Our clients do not consider that it is reasonable for the Government, having now conceded that it acted unlawfully should unilaterally decide that it can take its time to pay it back and not be responsible to those affected for the loss and damage its unlawful conduct has caused,’’ James Naughton, a partner at the firm Gordons Legal said.

“In our view any process undertaken will need to be approved by the Court to ensure that the rights of those affected, including their right to claim damages and interest are safeguarded.”

The Australian Greens said the robodebts were an “unfair, appalling and illegal program.”

“This is a historic day. I am overwhelmed thinking of the untold suffering that this illegal scheme has caused” said Senator Rachel Siewert.

“Going after people on income support has cost us all so much.”

Some suicides have been linked to the robodebt program with families revealing the fear of huge debts had caused enormous stress and anxiety for those who died.

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