The single mother-of-four Sandy Smith is still in the dark about how her robodebt came to be. But she believes it was part of two Centrelink debts she accrued while mourning the death of her husband in 2017.
The first of the debts was legally calculated and Smith paid it back during the toughest of times.
However, she understands the second debt – worth about $3,000 – was not legal and it has since been wiped from her record.
She had already been made to pay back $170 in instalments – money she never owed the government.
One of hundreds of thousands of members of the robodebt class action brought by Gordon Legal, Smith is now entitled to compensation through a settlement approved by the federal court last year.
She learned this week she will receive 96 cents. “It’s a bit of a joke, but what am I going to do about it?” Smith says.
Under the terms of the settlement, compensation payments reflect the interest owed, not damages.
Data released by Services Australia shows about 45% of all victims will get less than $100. About 25% will receive less than $50 and around 5% will get less than $10.
Smith says she has been traumatised by the experience. She no longer receives parenting payments despite being eligible because she is fearful of getting another debt in future.
“This is how much it has scarred me,” she says.
The majority of the $1.8bn settlement covered the wiping of existing unlawful debts and about $750m the government paid back to victims.
It also included $111m in compensation, of which $10.3m went to Gordon Legal for costs.
“People who paid back more, and were without their money for longer, will get larger settlement payments,” Centrelink said in a letter to victims.
The compensation pool is now being distributed between the victims like Smith and Lindsey Green, who was in her mid-20s when she was told she owed Centrelink about $700.
What followed was a nearly two-year ordeal in which she compiled 72 individual payslips – including gathering some from past employers – and provided them to Centrelink.
“I made this Google Sheet tracking literally every single week or fortnight within that financial year,” Green says.
Centrelink compliance workers previously gathered such evidence but under the robodebt scheme the former Coalition government “reversed the onus of proof”, forcing welfare recipients to show they did not owe the money.
After being told she would hear back from Centrelink in 14 days, Green says she was told nine months later she now owed the agency about $1,000.
When Green queried the outcome and told Centrelink she had submitted reams of paperwork many months ago, she learned the agency had “lost” her payslips.
She was made to return to a Centrelink office to submit the forms by hand, and ended up paying the agency $713 in 2019.
She later learned she never owed $116 of that debt, which had been calculated unlawfully.
Green was informed this week that she would receive an extra $2.73 from the settlement.
“The whole experience has made me more frustrated at how people who have a lot less advantages than I have [were treated],” she says.
Some have criticised Gordon Legal’s decision to settle the case, but the court heard there were slim prospects the claims for damages would have been successful. Taking the case to trial would have also added to the cost of running the case.
The former government did not accept legal liability in settling the case, but the Albanese government has called a royal commission that will commence this year.
Centrelink’s debt recovery during the robodebt period has been linked to at least three suicides, according to loved ones, while others have reported experiencing significant mental health trauma, financial distress, shame and stigma.
But Dr Darren O’Donovan, an administrative law expert at La Trobe University, says the settlement did “not purport to compensate people for any harms caused”.
This is because it was generally accepted by legal experts that Services Australia did not owe people “any duty of reasonable care when exercising its powers under the social security law”.
“These settlement amounts will themselves revive the trauma and suffering,” O’Donovan says. “It is the narrow response of a legal system, not the moral response of a community.”
O’Donovan says the case included a court-appointed independent contradictor who “provided a neutral appraisal of the prospects of success in the case and effectively represented victims’ interests in the calculation of cost”.
The Gordon Legal senior partner Peter Gordon welcomed the royal commission last month, saying the class action’s aim had been “to recover the money unlawfully taken from those Australians”, and that had been achieved.
In Australia, the crisis support service Lifeline is 13 11 14. In the UK and Ireland, Samaritans can be contacted on freephone 116 123, or email jo@samaritans.org or jo@samaritans.ie. In the US, the National Suicide Prevention Lifeline is at 800-273-8255 or chat for support. You can also text HOME to 741741 to connect with a crisis text line counselor. Other international helplines can be found at befrienders.org
