The outcome of a recent test case will bring a sense of hope to thousands of people in a confrontation with Centrelink who is demanding they repay debts they don't believe they owe. What is termed " Robo debt " is a nightmare for the average citizen forced to try and prove their innocence.
It usually starts with a letter from Centrelink claiming that their records show that an entitlement has been overpaid. Technically, Centrelink have the legal authority to raid bank accounts to recover money owed but they usually exert overwhelming pressure and force their customer to repay on an instalment plan.
The complexity of the legal definitions that underpin the legislation that supports entitlements is beyond the layman to understand. All the power is with Centrelink. Many people claim they are repaying debts they simply do not understand and in many cases, debts they do not owe. This caused Victorian Legal Aid to launch a test case to determine the validity of one of the methods of determining debt.
The basis is sometimes determined by taking the fortnightly average rather than the amount actually claimed and this resulted in a nurse facing repayment of a $4000 debt. When the case went to court the Department of Human Services immediately wiped that debt with a claim that new information had revealed the potential double accounting of income by one of the nurses former employers.
This leaves Robo Debt unclear, although the nurses lawyer has asked for the case to proceed in order to test the legal basis of the methodology used to calculate debts. The department was accused of acting in " bad faith " by its withdrawal.
The Australian Council of Social Services comments that this challenge has created significant doubt for thousands of vulnerable people who have settled debts. It called for the programme to be scrapped and remarked: " This isn't a one off case. It's one example of a system that doesn't work ".
The ball seems to be back in the court of Human Services and the outcome will be watched with interest. The nurse at the centre of this case no longer owes a debt, but the method that established that debt itself is going to trial if the case proceeds.
The Department of Human Services has declined to comment as the matter is before the court but this case is likely to decide the entire future of Robo debt. If nothing else, the outcome may be a new clarity on the way such debt is established.
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