By Mick Le Moignan
THE revelations (JEP 27 July) of hardship suffered by vulnerable Islanders forced to repay wrongly calculated income support benefits echo the recent exposure of the ‘Robodebt’ scandal in Australia.
In Jersey, the Salvation Army, one of three major food bank providers, made a written submission to the Health and Social Security Scrutiny Panel on behalf of several recipients, many of them elderly, who had unwittingly received income support benefits above their entitlement. When the errors were discovered and repayments required, they suddenly found themselves in financial difficulties and in need of food bank services.
Panel chair Deputy Rob Ward said that three out of five people interviewed at the hearing had tried to commit suicide or contemplated doing so. The Salvation Army’s submission argued that the most common reason for benefits being overpaid in the first place was that the social support system was ‘too complicated’ and ‘hard to navigate’.
One would hope that, in Jersey, individuals in such a predicament would be able to find a sympathetic ear and negotiate a resolution of the problem. Indeed, Social Security Minister Elaine Millar told the panel that appropriate safeguarding protocols were in place and advised anyone in financial difficulties to contact Customer and Local Services to discuss a manageable repayment plan.
Between 2015 and 2019, hundreds of thousands of Australian welfare recipients found themselves unable to speak to anyone because a huge flood of demands for repayment were sent out by an automated system with very little human intervention or support.
The problem arose because politicians tried to win favour by being tough on ‘dole bludgers’ and others who were, they claimed, enriching themselves by defrauding an over-generous system.
The scheme was launched by former PM Scott Morrison when he was Social Services Minister in the Abbott government in 2015. It enabled PM Tony Abbott to lambast the Gillard and Rudd Labour governments for supposedly being profligate with national resources.
The problem arose when the previous, manual, system of calculating overpayments was replaced by an automated data-matching process that compared benefits paid by the central social security service, Centrelink, with private, personal records held by the Australian Tax Office and then averaged out claimants’ incomes.
If their average income over a year or more exceeded the level at which fortnightly supplementary benefits were payable, demands for instant repayment were sent out automatically, with a surcharge of ten per cent and the threat of severe penalties for non-compliance.
The result was that many thousands of vulnerable people, already suffering financial hardship, were hit with demands for payments way beyond their means, against which they had no effective means of appeal.
There was a public outcry against the Robodebt scheme by lawyers, academics, media outlets and advocacy groups, but the government, probably reasoning that it was generating support for them among wealthy business, mining and rural communities, stood firm, claiming that hundreds of millions of dollars of overpayments were being recouped.
The flaws in the system soon became apparent. A number of recipients of the automated debt recovery notices committed suicide. Others with mental-health issues and some abuse victims died soon after receiving the notices. Demands were sent to dead people and disabled pensioners.
Many recipients complained to the office of the Commonwealth Ombudsman, which investigated the scheme and in 2017 issued a report strongly critical of the Department of Human Services. It advised them to reassess the whole practice and actively help welfare recipients to challenge their debt claim notices.
Two Senate committee inquiries were held. The first, in 2017, found ‘a lack of procedural fairness’ and that the scheme ‘caused emotional trauma, stress and shame’. It pointed out that the DHS had ‘a fundamental conflict of interest’ in that it stood to benefit financially if people found it difficult to navigate the system or contest an incorrect assessment.
The second Senate inquiry heard from two mothers whose sons, both in their 20s, had committed suicide after receiving automated debt notices. It accused the government of being impervious to the widespread harm caused by the scheme and of concealing evidence. Finally, it recommended a Royal Commission, Australia’s ultimate public inquiry.
The Royal Commission reported last month, calling the scheme ‘a costly failure in public administration, in both human and economic terms’. The Federal Court had decided in 2019 that the averaging process, using confidential ATO data to calculate debts, was illegal, and the commission concurred. It found that Mr Morrison had been warned in advance of the unlawful nature of the scheme and had allowed the Cabinet to be misled. The report included a sealed section recommending further action to be taken against certain unnamed individuals.
Mr Morrison told Parliament he had ‘deep regret’ for the impact of the Robodebt scheme on welfare recipients but accused the Albanese government of orchestrating ‘a political lynching’ and said the commission’s adverse findings in relation to his role were ‘disproportionate, wrong and unsubstantiated’.
Successive Australian governments have been trying to undo the harm done by Robodebt. In May 2020, two years before Mr Morrison left office, it was announced that 470,000 wrongly issued debts would be repaid and the scheme scrapped. A year later the Federal Court approved a settlement of $1.8 billion and in 2022 Anthony Albanese’s government cancelled the claims of 197,000 recipients who were still under investigation.
For Australia, the Robodebt affair has been a tragedy, a national disgrace and a salutary lesson. Governments must only operate within the framework of the law. Retribution may be slow to reach presidents and prime ministers who consider themselves above the rules that govern the rest of us, but there are encouraging signs in both the UK and the USA that even bombastic bigots may eventually have to pay a penalty for their egocentric abuse of power.
One of the advantages of a small population is that errors in public administration can be corrected before they do too much harm. Jersey’s Scrutiny system can help to ensure justice for all.
