Legal problems with the robo-debt scheme were “black and white” in 2014, according to one senior public servant.
Speaking about internal legal advice on a proposal under the former Coalition government to pick up welfare overpayments using an automated process called income averaging, former Department of Social Services (DSS) director of payment integrity Cameron Brown told a royal commission hearing earlier this month: “It was as definitive as I’ve ever seen.
“And the proposal needed to change, needed to substantially change, in order to proceed. The legal advice was black and white.”
Former Queensland Supreme Court justice Catherine Holmes, who is heading the royal commission, says it will examine how the robot-debt scheme was set up and “why, perhaps more puzzlingly, it was maintained”.Credit:Mark Cranitch
But the commission, before former Queensland Supreme Court justice Catherine Holmes, heard from a DSS lawyer that the advice was not passed on to the agency from which the proposal had come – the Department of Human Services.
The robo-debt scheme was launched in 2015 with the aim of clawing back $750 million from nearly 400,000 Centrelink recipients it alleged owed the Commonwealth money. The system took annual income data and averaged it over 26 fortnights, presuming income was the same across each, and put the onus on welfare recipients to disprove alleged debts.
That method was ruled unlawful in 2019 and the government settled a class action on the morning of the scheduled trial in 2020. But it was too late for those whose families said took their own lives as a result of the scheme.
In approving a $1.8 billion settlement for victims in the class action, Federal Court judge Bernard Murphy said the case had “exposed a shameful chapter in the administration of the Commonwealth social security system and a massive failure in public administration”.
The royal commission, a seven-month inquiry, was announced by Government Services Minister Bill Shorten in August.
In her opening remarks in September, Holmes said it fell upon the inquiry to examine how the robot-debt scheme was set up and “why, perhaps more puzzlingly, it was maintained”.
Commission counsel Justin Greggery KC told the first tranche of hearings, which began on October 31, the departments received legal advice about the scheme “before and during its implementation”.
“That advice at the very least raised significant questions about the legality of the scheme,” Greggery said.
Over the following two weeks, the commission heard from a roll call of senior public servants who highlighted a lack of communication, siloed work between the DSS and DHS, and failures to pass on legal concerns.
It was told of pressure coming from former prime minister Scott Morrison, who was then social services minister, to have the proposal submitted to the Department of Finance during 2015.
Mark Jones, a former DSS assistant director, said he didn’t raise questions about why serious legal criticisms of the scheme he had seen had been ignored because he was “too low down the chain”.
DSS lawyer Anne Pulford told the commission she found no record of external legal advice received from law firm Clayton Utz in 2018 about the legitimacy of the scheme having been taken on board.
Holmes asked Pulford whether the department’s approach to unfavourable legal advice was to just leave it, which Pulford confirmed, adding she had seen it done many times. Holmes said she was “appalled” by this.
Serena Wilson, a former DSS deputy secretary, gave evidence she felt “ashamed” at not having spoken up about the legal problems. She said detailed legal advice was provided to DHS, now called Services Australia, before the program was rolled out.
But she believed this advice was not passed on to Morrison because there was some “role confusion” between the two departments. Wilson said she trusted DHS officers to pass on the legal advice to the minister, but in hindsight should have done more to ensure they did.
“When [the brief] was finally put to Minister Morrison, it shows repeated watering down of the quite specific and explicit information that DSS had provided to DHS,” she said.
Wilson said she initially didn’t think income averaging had made its way into the debt collection scheme but found out in 2017 that it had. She said she told no one because she “lacked courage”.
“Human Services were running and implementing the program and it was a difficult position [for me] to be in,” she said. “Now, I’m ashamed and in hindsight I could have spoken up.”
NSW’s Welfare Rights Centre executive director Katherine Boyle set up a “debt clinic” to offer legal help to people who had received payment demands. But she said she couldn’t easily extract necessary information from the government, and in some cases, people had been called by debt collectors rather than Centrelink.
The commission also heard instances of people being told to borrow money to pay off debts of several thousand dollars.
The hearings will resume next month.
and AAP
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