Victims of robotic debt “treated like criminals” | Great Lakes Defender

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Robodebt victims were treated like “criminals” and felt like “welfare cheaters” by Centrelink staff and debt collectors, the Federal Court said. Hundreds of participants in a class action lawsuit against the Commonwealth’s robodebt program have opposed a $ 1.2 billion settlement of the case. Fiona Forsyth QC, representing more than 600,000 members of the Gordon lawsuit, said the use of flawed income averaging tools to increase debt caused stress and humiliation for vulnerable people. The victims were “treated like criminals” and left “to feel like welfare cheaters” as they received rude calls from debt collectors and Centrelink staff, Ms. Forsyth said. Their tax returns were seized, forced to take additional jobs or expensive loans, and were adversely affected in their relationships and mental health, sometimes resulting in self-harm. One man, John, said he couldn’t eat or sleep and lost his pay because he couldn’t work while trying to prove he was not in debt to Centrelink. “The government is getting away with being crooks while making the little people believe that what they have done is wrong,” he said in a statement read to Judge Bernard Murphy. The automated matching of tax and Centrelink data to incur debts against welfare recipients the government claimed to have overpaid was declared illegal in 2019. The Commonwealth subsequently settled the case without admitting its legal responsibility. Under the settlement, which still requires final court approval, victims would receive $ 112 million in compensation, be reimbursed $ 720 million, and have $ 400 million in illegal debt written off. Judge Murphy described it as a “good settlement” but also questioned the fairness of the final distribution of funds. “You have a series of people with strong claims and weaker claims,” he said. “And rather than spread it out, strong claims get everything and weak claims get nothing.” Acting for Gordon Legal, Bernie Quinn QC defended the firm’s acceptance of the settlement. “You have to ask yourself: do I risk losing everything or am I taking what I can have? he said. Meanwhile, the company’s plan to cut administration costs by $ 4.4 million from the final figure has been criticized by Michael Hodge QC, acting for the Commonwealth. He also targeted Gordon Legal’s plan to deduct an additional $ 14,000 for the production of a previous video promoting the action. Mr Hodge argued that the clip led to “unfounded claims” on behalf of individuals ineligible to participate in the settlement. More than 500 people objected to the settlement and many of them had “poignant stories,” Judge Murphy noted earlier. Some claimants have complained that no one in power has been held responsible for the robodebt scandal. Jennifer Miller said Thursday that robodebt played a “very important” role in the suicide of her son Rhys Cauzzo about four years ago, after being sued by Centrelink and debt collectors. The case will return to court at a later date. Associated Australian Press

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