A controversial ‘robo-debt’ has been ruled unlawful in the Federal Court because Centrelink could not have been satisfied the debt was correct.
The court decision comes after the Federal Government made significant changes to the debt recovery system, which has used data-matching to land people with debts they do not owe.
Victorian woman Deanna Amato was ordered to pay back $2754 to the Department of Health and Human Services, which runs Centrelink, and her tax return of $1709 was seized.
But when Victorian Legal Aid took her case to the Federal Court, she was paid back the amount taken from her tax return.
Victorian woman Deanna Amato was ordered to pay back $2754 to Centrelink but challenged the bill in court and won after a judge ruled the debt was not reliable (pictured stock image)
It ‘could not have been satisfied that a debt was owed in the amount of the alleged debt’, Justice Jennifer Davies decided in the Federal Court.
The justice decided Ms Amato was also entitled to the interest earned on the money and the government was ordered to pay her legal costs
The government must reimburse her $92.06 and pay her legal fees.
‘I had my money refunded to me, but I hope that others who have paid dodgy debts will also have a way to get their money back,’ Ms Amato said.
‘My robo-debt should never have occurred in the first place.
‘I feel pleased to have gotten this outcome but it’s bittersweet to know so many people have paid money under this system.’
Victorian Legal Aid’s Rowan McRae said the government had conceded the income-averaging process used to calculate the debts was unlawful.
‘Deanna’s case has helped to clarify the unlawfulness of the robo-debt system for hundreds of thousands of Australians in the same situation, who received or paid off a robo-debt based only on averaging,’ Ms McRae said.
‘The orders today confirm that the process used against her was unlawful,’ she said, adding it should ‘never have happened’.
Victorian Legal Aid’s Rowan McRae said hundreds of thousands of Australians could be in the same situation, who received or paid off a robo-debt based only on averaging
Ms McRae said the number of people affected by robo-debt was unclear because of a lack of transparency around the way the debts were applied.
On November 19, the Federal Government announced it was winding back the robo-debt scheme, which is also facing a potential class action lawsuit.
The Department of Human Services has told staff to not rely entirely on the robo-debt system and instead undertake further investigations to determine whether people may owe money.
‘The prime minister owes the Australian people an apology for this extraordinary program that – I will say it again – it is extorting money, making false demands of Australian citizens,’ Labor’s shadow attorney-general Mark Dreyfus told ABC News.
Labor says the government should now look at every case where the robo-debt system was used.
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