When a Melbourne mother of two discovered she was unknowingly sitting on a $27,513 debt, she was devastated.
“I just couldn’t believe it, there was no explanation, there was no reasoning,” Laetitia Encarta said.
She was told by Centrelink she had been incorrectly reporting her income, but the operators on the phone couldn’t provide further information.
After about a dozen calls, Laetitia collected two years of payslips - even contacting a former employer - to dispute the debt.
Source: Laetitia found this from human services in her myGov inbox
I haven’t even received any documentation in this process. It’s been bizarre
Laetitia received the debt from Centrelink automated debt recovery system, dubbed “robo-debt”.
This week, Victoria Legal Aid announced it’s filed a case against the Department of Human Services, arguing the way the automated system calculates the debt is unlawful. This marks the first time the Centrelink’s robo-debt processes will be challenged legally.
For Laetitia, her case is still under appeal. She says although she’s in limbo - not knowing if she’ll have to payback the $27,000 - the action against the government is encouraging.
SUSSING OUT ROBO-DEBT
- Centrelink recipients have to report their income (and any changes to it) every fortnight.
- If it’s done incorrectly and you’re overpaid… you have to pay the money back.
- As of July 2016, Centrelink’s been using an automated system to work out and issue debts, comparing the data recipients provide with data from the ATO. The ‘robo-debt’ is calculated from averaging all that info out.
- Thousands of Centrelink customers have been issued these debts with many claiming the system is a crude and inaccurate way of showing someone has been overpaid
If you don’t agree with the robo-debt you’ve received, the onus is on YOU to prove you don’t owe Centrelink money, rather than Centrelink themselves proving you do. That can mean trying to gather payslips from jobs you may have worked years ago.
But for people Laetitia, there may be hope. And it sits in the federal court.
CENTRELINK'S TIME IN COURT
Victoria Legal Aid has filed a case on behalf of Madeleine Masterson - a nurse who works at a Melbourne hospital.
Her alleged debt accumulated when she was studying and receiving Youth Allowance, and like Laetitia, she was given no information about how her debt was calculated.
The case will argue Centrelink’s approach to estimating whether someone has been overpaid is unlawful.
Victoria Legal Aid’s Executive Director of Civil Justice Access and Equity Rowan McRae says she believes robo-debt is deeply flawed.
We want this case to pave the way for a fairer, smarter and more accurate system which works for government, but also for the many people who access social security at some point in their life.
The results could affect tens of thousands of social security recipients.
