Your Guide to Robodebt Schemes

In the past, Services Australia manually calculated overpayments and issued debt notices to recipients. This was a time-consuming and complicated process, leading to what’s known as the Robodebt scheme also known as the Online Compliance Intervention (OCI).

Launched in July 2016, the Robodebt scheme was an automated debt recovery process used within the Centrelink payment compliance program. Throughout its history, this scheme was widely criticised due to allegations of false, confusing, or incorrectly calculated debt notices.

In 2020, the Robodebt scheme was stopped. Now, Prime Minister Scott Morrison says over 470,000 wrongly-issued debts will be repaid in full to Australians who were affected. How do you learn if you were affected by this scheme, and how do you get your money back? In this guide, we share everything you need to know about Robodebt schemes.

How Did the Robodebt Scheme Work?

The automated system known as the Robodebt scheme began in 2016 as a way to detect overpayments and potential debts. Using information from the Australian Tax Office (ATO), the system automatically determined if there was an issue in what someone paid or owed.

If it suspected a problem, the Robodebt scheme took automatic action. This was typically an automated letter from Centrelink advising of a potential debt. In the letter, Centrelink requests additional information about your income such as payslips.

If you ignore these requests, Centrelink used the information they have from the ATO to determine your debt. For those who didn’t provide the request information, this debt had to be repaid. On the other hand, if you did submit information about your pay, this would be taken into account when determining how much you owe.

Because Centrelink didn’t take any steps to get information about your pay details, etc as they did in the past, many of the determined debts were incorrect or false. These notices and unnecessary payments created both financial and emotional strain for recipients of these automated messages.

Why Did Robodebt Scheme Stop Efforts?

In just 6 months, the Robodebt scheme issued over 169,000 debt notices. Through these, it recovered around $300 million. They decided to create a similar scheme for the Aged Pension and Disability Pension to recover further funds.

Unfortunately, the scheme wasn’t functioning properly. Some of the alleged problems included:

  • Harming the mental wellness of those who receive notices of large sums of debts
  • Debt notices were incorrectly sent to deceased people
  • Debt notices were issued to the vulnerable

More and more complaints filed into the Commonwealth Ombudsman which led to an investigation of the Robodebt scheme. However, it wasn’t until 2019 that even more problems were found through Legal Aid Victoria. The calculations used by the scheme were not correct, and the process was determined to be unlawful in court.

Now, there is a class action suit challenging the legality of the robodebt scheme. The Australian government settled out of court and agreed to refund or cease pursuing these debts. There are around 400,000 victims of robodebt, and these payments will be made in 2021.

How to Find Unlawful Robodebt

Do you have any unlawful robodebt? It’s important to first note that not all Centrelink debts are unlawful. Some are calculated correctly, in which case you won’t be eligible for any compensation. However, there are some ways to understand whether or not you might have been affected.

A debt is unlawful with the robodebt scheme if Centrelink used the Australian Tax Office data to calculate a debt or part of a debt. However, it’s hard to know if this occurred. You might have received a robodebt notice if:

  • You were told there was a data match with the ATO in relation to your income
  • You were asked to provide information about your pay, bank statements, etc.
  • You didn’t provide the information above or enough information

It’s important to note that you always have the right to view or get copies of your personal information kept with Centrelink. This includes any information about your debt. You can make any request in writing by contacting the legal team at Australia’s Human Services office.

If you received a request for more information and you didn’t respond, it’s very possible that your debt was calculated incorrectly. Taking your specific earnings and work situation into account was key to determining accurate debts and repayments. Either way, it’s important to keep clear, accurate records to determine how much you owe now or in the future.

Can I Get My Robodebt Money Back?

If you determine you likely have unlawful debt with the Robodebt scheme, can you get this money back? The short answer is yes. The Australian Government began giving refunds to people who have paid these unlawful debts starting 1 July 2020. Over 100,000 people already reported receiving these repayments from the government, though many more are still owed.

How will these debts be repaid? According to the government, these refunds will be given automatically. The government will contact and fund these refunds automatically. To make sure you get your refund quickly, check that your contact information is up-to-date with Centrelink. You can make changes within your MyGov account.

What Happens If You Owe Centrelink Money?

The reason so many people received these robodebt notices is because owing money to Centrelink is relatively common. It’s important to check how much money you receive from Centrelink to protect yourself. Many people don’t realise that Centrelink can demand repayment of an overpayment of benefits regardless of whether it’s your fault.

If you receive any Centrelink money you’re not entitled to, this could very well be Centrelink’s mistake. No matter how it happened, it’s important to check whether you owe Centrelink if you receive a notice in the mail.

You’ll know if you owe Centrelink if you receive a letter. Usually, these letters ask for more information about your pay or bank information. Otherwise, they ask for repayment within a few weeks. While these are understandably intimidating, don’t fret. You always have options. In most cases, you can ask for a repayment arrangement. Here’s what you need to do next:

  • Your budget: First, determine how much you can afford to pay. Do this by adding up your income, your expenses, and determining a monthly budget you can afford.
  • Talk to Centrelink: Next, ask for a payment plan through Centrelink. This might be deducted from current Centrelink payments or from your own pay.
  • Debt waiver: In rare cases, Centrelink will waive the debt. This is only if you didn’t contribute knowingly to any overpayment (admin error) or if you’re facing financial hardship.

When in doubt, contact our experts. The professionals at Debt Busters are here to help with all of the steps above, whether you don’t know how much you owe or you’ve received a notice in the mail. Contact a member of our team today on 1300 368 322 to create a plan built for your lifestyle.

How to Appeal Centrelink’s Decision

There are some cases when you might not believe you owe Centrelink money. As explained above, sometimes mistakes happen. These can happen because of an administrative error, and sometimes it’s nobody’s fault.

Luckily, it is possible to appeal Centrelink’s decision. You always have the right to appeal this decision if you believe it’s wrong. In addition, appealing is free and simple. You can complete your appeal in writing, over the phone, or online by appealing to the Administrative Appeals Tribunal (AAT).

To start, apply for a review online or visit the AAT contact page for other ways to get in touch. You’ll need to include all of the requested information, including your name, address, contact information, date of the decision, and why you think the decision is wrong.

Again, working with a debt professional is the best way to streamline this process. You never have to handle your debt appeal, repayment, or long-term arrangement alone. These processes are often tricky if you’re not familiar with the next steps. The team at Debt Busters are here to help you.

Understanding Robodebt Schemes

Robodebt schemes have come a long way since 2016. Though it began as a way to simplify the process for those receiving Centrelink payments, it ended up causing more headache than it was worth. Luckily, the government responded promptly to remove this scheme, and repayments are automatically happening throughout 2021 to repay those affected.

Whether you are eligible for repayment or not, it’s important to check in with your current Centrelink payments and eligibility. Though there’s a lot of trust in this system, mistakes do happen. It’s up to you to stay on top of your earnings, documentation, and eligibility. From there, you can take action to protect your finances and your Centrelink payments.

If you find yourself in one of the situations described above, take action today. Contact our professionals at Debt Busters on 1300 368 322 for help with your next step. With over 15 years of experience, we have experience working with clients of all backgrounds to create a brighter, easier financial future.

Speak to us today

Debt Busters is an Australian owned business which was founded in 2005 - since then we have been able to help thousands regain financial control.

Debt Busters prides itself on providing a dedicated Client Service Manager to work closer with you and provide a higher level of customised service about your situation.