Welfare

Victim of bungled robodebt scheme says she's 'furious' with the government's response to $1.2 billion settlement

Felicity de Somerville pictured with her daughter. Source: Supplied

The Federal Court heard that as part of the robodebt scheme, the federal government unlawfully raised $1.73 billion in debts from 433,000 people.

A lead plaintiff in the settlement between robodebt victims and the federal government has blasted its response to the case as inadequate.

Justice Bernard Murphy on Friday approved a $1.2 billion settlement between robodebt victims and the federal government while blasting the scheme for being a "shameful chapter" in public administration.

Responding to the settlement outcome, Treasurer Josh Frydenberg said the issue has now been dealt with.

"There was a settlement. We have said we have apologised. The Prime Minister has said that himself for the harm, the hurt, the hardship that has been caused by the administration of the scheme," Mr Frydenberg said.

He said previous governments were also responsible for the robodebt policy.

"It is very difficult when it comes to recovering debts. But it is a process that has been adopted by successive governments and obviously we accept the settlement that has been announced by the court today."

Lead plaintiff Felicity de Somerville said the response from Mr Frydenberg was not sufficient.

"I'm furious with the Treasurer and his comments today. I come from a profession [nursing] where our pillars of what we do are integrity and accountability, and if this was to happen in my field of work, there'd be complete public uproar," she told SBS News.

"You have to take accountability for what you do, and the government knew what they were doing. They knew what they were doing was not ethical."

In 2017, Ms de Somerville realised Centrelink had taken the equivalent of six months wages out of her account without warning when she tried to pay for her one-year-old daughter’s medication for a bad chest infection.

She said pursuing the legal case only increased her debt, but she is still happy with the outcome for victims who were not able to advocate for their situation.

"We had analysts from Gordon Legal and from the government recalculating people's debts. My debts actually increased. Financially this hasn't helped me, it's burdened me.

"But I'm still really happy with the outcome because John Smith in Spring Vale who's on disability, who didn't know how to navigate the system and didn't have a voice, they'll be compensated. It's not about me."

Justice Bernard Murphy on Friday said the use of flawed income averaging tools to raise debts caused vulnerable people financial hardship, distress and anxiety.

Many felt shame and hurt at being wrongly branded "welfare cheats", he said, with some driven to take their own lives.

The settlement distribution scheme had also resulted in a "huge waste of public money".

"The proceeding has exposed a shameful chapter in the administration of the Commonwealth social security system and a massive failure of public administration," Justice Murphy told the Federal Court.

It should have been "obvious" to the government that many welfare recipients do not earn a stable or constant income, he said, and may only be employed on a part-time, casual or intermittent basis.

However, Justice Murphy was not convinced the federal government knew the robodebt scheme was unlawful from the start.

"I am reminded of the aphorism that, given a choice between a stuff-up and a conspiracy, one should usually choose a stuff-up," he said.

The 648,000-strong class action was led by Gordon Legal.

Justice Murphy approved $8.4 million in costs to the firm and said the 680 people who objected to the settlement would be given the opportunity to opt out.

The judge said government ministers should have known the Robodebt scheme was flawed.
The judge said government ministers should have known the Robodebt scheme was flawed.
AAP

Gordon Legal partner Andrew Grech said the settlement approval would bring closure to the victims of the robodebt scheme.

"We hope this outcome brings peace of mind and some certainty to all class action members and acts as a strong deterrent against similar callous welfare practices for both present and future governments," Mr Grech said.

The automated matching of tax and Centrelink data to raise debts against welfare recipients the government claimed to have overpaid was ruled unlawful in 2019.

The Commonwealth subsequently settled the case without admitting legal liability.

Lead plaintiff Felicity de Somerville said the response from Mr Frydenberg is inadequate.

"I'm furious with the Treasurer and his comments today. I come from a profession [nursing] where our pillars of what we do are integrity and accountability, and if this was to happen in my field of work, there'd be complete public uproar," she told SBS News.

"You have to take accountability for what you do, and the government knew what they were doing. They knew what they were doing was not ethical."

She said pursuing the legal case only increased her debt, but she is still happy with the outcome for victims who were not able to advocate for their situation.

"We had analysts from Gordon Legal and from the government recalculating people's debts. My debts actually increased. Financially this hasn't helped me, it's burdened me.

Treasurer Josh Frydenberg said the federal government accepts the settlement announced by the Federal Court.
Treasurer Josh Frydenberg said the federal government accepts the settlement announced by the Federal Court.
AAP

 

Jennifer Miller in May said robodebt played a "very prominent" role in her son Rhys Cauzzo taking his own life about four years ago after he was pursued by Centrelink and debt collectors.

Ms Miller objected to the settlement in a previous Federal Court hearing, arguing that no one in power had been held accountable.

"The only thing I've ever had is platitudes - I've been shown no respect," she told the court.

"There has been no accountability. This was proven to be an illegal process early in the piece."

Ms Miller said Centrelink pursued her son despite knowing he had mental health issues and also gave private information about him to the media.

Another person who objected to the settlement, Jeremy Lee, detailed his experience with the "targeted, punitive" program.

He also raised concerns the settlement offered by the Commonwealth allowed politicians to avoid admitting publicly that robodebt was unlawful.

"The government will have used state power to persecute the weakest members of society and then used public funds to stop them being held accountable," Mr Lee said.

Under the settlement, victims will receive $112 million in compensation, be repaid $720 million and have $400 million in unlawful debts wiped.

Justice Murphy earlier described it as a "good settlement", but also questioned how fair the ultimate distribution of funds would be among the group members.

"You've got a series of people with strong claims and weaker claims," he said.

"And rather than apportioning them, the strong claims get everything and weak claims get nothing."

Readers seeking support can contact Lifeline crisis support on 13 11 14, Suicide Call Back Service on 1300 659 467. More information is available at Beyond Blue.org.au and lifeline.org.au.

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