The class action firm that pursued the Morrison government over the "robo-debt" scandal says the decision to repay $721 million of unlawful debts recouped from low income Australians was not the end of the saga and it would push for damages for its clients' distress.
Minister for Government Services Stuart Robert announced on the eve of mediation on the class action that the government would repay 373,000 Australians who had been hit with debt notices about alleged welfare overpayments based on flawed calculations.
Part of the scheme that became "robo-debt" was announced ahead of the 2016 election by then-treasurer Scott Morrison and finance minister Mathias Cormann as a component of a welfare crackdown forecast to raise billions and help pay for the government's spending.
The government is still facing a class action over the scheme, which Labor said was the trigger for the repayments. Services Australia, which administered "robo-debt", had already been forced to send letters to thousands of the scheme’s victims telling them they could join the class action.
Andrew Grech, a partner at class action firm Gordon Legal, said the government had to explain to the court why it had made the announcement with no consultation with robo-debt victims.
"The government can't only hand back what they've unlawfully taken, they've also got to compensate the people they've harmed," Mr Grech told The Sydney Morning Herald and The Age.
Government Services Minister Stuart Robert has announced a massive refund for people who were issued debts through the government's "robo-debt" program.Credit: Alex Ellinghausen
Gordon Legal will push for damages for its clients' distress and interest on the money claimed back unlawfully.
Mr Robert said all money the government had recovered through the "income averaging" method used by robo-debt, which incorrectly presumed money people earned annually could stand in for their weekly earnings to determine welfare eligibility, would be refunded.
"The total value of refunds including fees and charges is estimated at $721 million," Mr Robert said on Friday afternoon.
"This is a program that started five years ago based on the best information at the time," Mr Robert said. "I have been the responsible minister for 12 months. As soon as information came to light that showed there was a lack of sufficiency, I moved quickly to pause all debts and refine the program."
But of the 373,000 people who are owed money, the government does not have full and current details for almost half. It will make payments to 190,000 from July and try to contact the remaining 183,000.
The government stopped using the income averaging method in November last year. It had been advised by the public service that it was "unlawful" and admitted the same in a lawsuit.
Complaints against "robo-debt" go back years earlier, with the Administrative Appeals Tribunal warning of problems with the scheme in 2017. The same year a Senate inquiry heard about a 28-year-old who committed suicide while being pursued for a $10,000 debt under the scheme.
The government has consistently denied any link between "robo-debt" and deaths, pointing to the numerous factors that could contribute.
Labor's spokesman for government services, Bill Shorten, said the government should apologise.
"They will still have to account to the families who lost adult children to suicide because of robo-debt, and for the various other harms, stresses and inconveniences caused," Mr Shorten said. "For Stuart Robert, sorry seems to be the hardest word."
Last year Mr Robert said only a "small cohort" of people will be affected by reviews of the scheme, but Services Australia data provided to the Senate suggested at least 220,000 cases were likely to be re-examined. On Friday the government announced 470,000 debts would be refunded.
"It is important to note all other income compliance debts will continue to be subject to recovery, ensuring the integrity of Australia’s welfare system," Mr Robert said. He said people affected by the repayments did not need to do anything to get the money back.
Greens Senator Rachel Siewert, who chaired a Senate inquiry into the issue in 2017, said the government had known of robo-debt's flaws but "continued to treat people appallingly".