Exclusive: New figures add to evidence that rising numbers of vulnerable people have been forced to pay back welfare overpayments

This article is more than 7 months old

This article is more than 7 months old

Disability support pension recipients were increasingly forced to pay back alleged welfare overpayments as the government’s botched robodebt scheme progressed, despite repeated claims that the program did not target the vulnerable.

As the government faces increased pressure over emails showing it received legal advice the scheme was unlawful, it can be revealed that at least 11,000 disability support pensioners have paid back robodebts in full since 2016, and the value of debts settled in full by these recipients increased by 230% between 2017-18 and 2018-19.

The legality of the scheme was already under scrutiny – with the government facing a federal court challenge – as more money was extracted from disability support pensioners, who were on track to give up a record amount in the six months to December. The government settled the case in November.

Almost 10,000 people register as robodebt class action gains momentum Read more

Now, many of the 600,000 debts issued are under a legal cloud, as the government faces the prospect of being forced to refund thousands of welfare recipients issued debts solely based on the flawed “income averaging” methodology.

Bill Shorten, Labor’s government services spokesman, told Guardian Australia: “Assurances by the government that they have not been using robodebt on vulnerable people have been revealed to be plainly false.”

Individual robodebt cases against the vulnerable – including a $14,500 debt against a disability support pensioner – have previously been reported, but the government has always played down the number of vulnerable people captured by the scheme.

When the Guardian in August revealed a secret proposal to significantly expand the program to target people aged over 65 and other “sensitive groups”, which would include people with disabilities, the government said it was not “considering any proposal to commence online compliance for vulnerable Australians”.

The new figures, provided to the Senate in response to questions from Labor, add to the evidence that people who the public would consider vulnerable have increasingly been drawn into the scheme.

They show disability support pensioners paid back $7.7m in robodebts throughout 2018-19, up from $2.3m in 2017-18. In the six months to 31 December 2019, they had already paid back $7.2m.

Among those receiving Sickness Allowance – paid at the Newstart rate for people unable to work due to a medical condition – Centrelink raked in $2.8m in 2018-19, an increase from $1.6m over the previous 12 months. Again, 2019-20 was set to be the most lucrative year for Centrelink among this group, with $2.2m already paid back in just six months.

However, the data only covers debts paid back in full, meaning it is likely that the total number of debts issued and the value of those alleged overpayments would be much larger.

The government has previously said it issued about 600,000 debts worth about $1.9bn as part of the scheme, though most of that money has not yet been paid back. In general, the scheme has focused on alleged overpayments from Newstart, Youth Allowance and parenting payment.

A spokesman for Services Australia, Hank Jongen, told the Canberra Times in November that an “early change to the program” made by the agency was that it would not conduct income compliance reviews for people with vulnerability indicators.

But under Centrelink’s processes, disability support pension recipients are not automatically given a vulnerability indicator on their file.

Shorten said: “Services Australia touted improvements to the system to spare the vulnerable, but these figures obtained by Labor in the Senate show the opposite.”

The Greens senator Rachel Siewert said she was also deeply concerned the data appeared to show the government had been “significantly targeting people on disability support pension”.

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“If you’re on disability support pension, you already have a whole range of issues you are dealing with, and I would suggest that they are more vulnerable to the pressure of getting a notice,” she said.

The government said in November it had raised more than $15m through the robodebt program from 9,149 people with a vulnerability indicator.

The Department of Human Services, now Services Australia, has also previously said only a “small number” of pensioners were targeted in online compliance reviews.

Within its submission to the Senate inquiry into the robodebt program, it said 4% of all income reviews were targeted at disability pensioners. This would equate to 34,000 robodebt reviews of disability pensioners, according to a total of 850,000 reviews recorded by the agency between 2016-2019.

The data published in the Senate showed that in 2018-19, Centrelink seized $182,292 from tax returns over disability support pension debts, an increase of 1,897% from the previous year.

Jongen said the data “does not represent an increase in review activity”.

He said there had been no increased focus on disability pensioners but would not say why the value of debts paid back in full among disability support pensioners had dramatically increased.

Addressing increase in tax refund garnishees, he added: “The statistics reflect an overall trend in the number of former customers meeting the criteria for tax refund garnisheeing which occurred across all payment types during the 2018-19 financial year.

“Tax refund garnisheeing for 2018-19 mostly reflects the finalisation of older reviews initiated up to three years earlier.”

The government is under pressure to reveal when it received legal advice that the robodebt scheme was unlawful. It has so far refused, citing an ongoing class action launched by Gordon Legal late last year.

Do you have a story? luke.henriques-gomes@theguardian.com