Robodebt chaos went on for years despite being ‘known issue’, royal commission hears

The former Liberal government’s robodebt saga continued for years despite top officials being aware debts served out were “known” to be inaccurate, a hearing has heard.

The robodebt saga continued for years despite top officials “knowing” the debts served out were inaccuarate, a hearing has heard.

Annette Musolino, who was chief counsel at the Department of Human Services between 2016 and 2019, fronted the royal commission on Monday in a lengthy appearance where she fielded questions on the scheme’s legality.

When asked by commissioner, Catherine Holmes AC SC, whether there was room for inaccuracy in the income averaging method, Ms Musolino said she “genuinely think people understood” its shortcomings.

“I think it was understood it was ultimately lawful to make a decision,” she said regarding whether officials were aware.

The robo debt saga continued for several years. Picture: NCA NewsWire / Brenton Edwards

“And that the only way we could end up doing 20,000 [debt review] interventions a week compared to 20,000 a year is to find a more efficient process.”

Robodebt was an automated welfare recovery scheme that matched annualised pay information from the ATO and income data reported to Centrelink to detect overpaid welfare payments.It resulted in more than $720 million taken unlawfully from hundreds of thousands of Australians.

Ms Holmes said the mammoth scheme relied on an inconsistent system propped up by just one piece of internal legal advice.

This came as the Department of Human Services (DHS), relied on advice from the Department of Social Services (DSS) about how welfare debt could be calculated.

In response, Ms Musolino said this was despite advice from DSS in 2014 that it would not be lawful to use averaged Australian Taxation Office income data to create a welfare debt.

“Our understanding was the ATO data itself was sufficient information to reach that conclusion [to raise a debt] or to make that assessment and make that decision,” she said.

“They [DSS] made it crystal clear that this is something that had been considered in the approach to cabinet in 2015. And that it was lawful.

“We rely on the agencies that we deliver services for. They design the program, they determine the parameters, they determine the legality of it.”

Ms Musolino earlier told the inquiry senior executives at the department were largely ignorant of how effectively the system was operating.

The royal commission is investigating how Australians’ annual tax information was used to determine average fortnightly earnings and automatically establish welfare debts.

The practice was ruled unlawful by the Federal Court in 2019. It is believed to have wrongfully recovered more than $750 million from 381,000 people.

Former Coalition ministers Alan Tudge and Christian Porter are expected to front the commission on Wednesday and Thursday.

Hearings are set to restart at 10am AEST on Tuesday.

Originally published as Robodebt chaos went on for years despite being ‘known issue’, royal commission hears