Hundreds of thousands of robodebt victims with debts hanging over their heads have had their cases wiped.
Almost 200,000 people who spent years fighting to clear welfare debts they didn’t owe will have any active Centrelink investigations wiped.
The federal government will scrap the cases of robodebt victims still under review, with any potential debt no longer being pursued.
The unlawful debt recovery scheme started in 2015 and falsely accused welfare recipients of owing money to the government.
During the period of robodebt, an algorithm – instead of a human – identified and pursued outstanding payments, with the system capable of sending out 20,000 notices a week, instead of 20,000 a year as was the case when humans were involved.
More than $750 million was wrongfully recovered from 381,000 people.
Social Services Minister Amanda Rishworth said clearing the outstanding cases would offer certainty to any Australians with reviews hanging over their heads.
Ms Rishworth said pursuing the cases would be expensive and time-consuming, and would undermine public confidence in the welfare system.
“The robodebt fiasco is something that should be of deep concern to all Australians. We know it had a significant human cost,” she said.
A royal commission into the robodebt scheme will begin public hearings at the end of October.
What led to the robodebt royal commission?
There have been numerous investigations and inquiries into the scheme since its introduction, with the Commonwealth Ombudsman finding multiple issues with the scheme in 2017.
In 2019, the robodebt scheme was ruled unlawful by the Federal Court.
The former government said they would be repaid in full at a cost of $721 million, and in November 2020 agreed to a $1.2 billion class action brought on by 400,000 victims.
In June 2021, Justice Bernard Murphy approved a settlement of $1.8 billion including repayments of debts paid, wiping of outstanding debts, and legal costs.
He described the program as a “shameful chapter” in Australia’s social security scheme.
The robodebt royal commission was announced on August 25, with Prime Minister Anthony Albanese describing the scheme as a “human tragedy with real consequences”.
“We know that almost 400,000 Australians fell victim to this cruel system. A human tragedy with very real consequences for its victims,” Mr Albanese said.
The inquiry will examine the establishment and implementation of the scheme, the handling of concerns, the impact and cost, and measures to ensure such a scheme does not take place again.
Former chief justice of Queensland Catherine Holmes is heading the royal commission and will deliver her final report to the governor-general by 18 April 2023.