Robodebt victims referred to debt collectors even after government-recognized program was illegal | Centrelink debt collection

Nearly 1,000 robodebt victims have had their debts sent to an outside debt collector, even after the government admitted in court that the program was illegal, new figures show.

Commonwealth Ombudsman report released last month lambasted Services Australia for failing to halt all debt collection activities after November 2019, when the Morrison government agreed his method of raising debts was “legally insufficient”.

In response to questions posed in a Senate inquiry, released Wednesday, the agency that managed the program revealed that it continued to accept reimbursements from more than 123,500 people after that date.

And there were 961 people who “had debts like this that were referred to an outside debt collector” who then required “remediation,” he said in another response.

One of the main complaints among victims of the scheme has been the conduct of outside debt collectors, with a robodebt beneficiary being tracked down telling Guardian Australia last year that he receives counseling to discuss period trauma.

Of the 123,500 people who continued to pay debts after the government accepted its program to be illegal, the agency said the “majority” had “made their last repayment on those debts by February 29, 2020. “.

“The process of reviewing a client file to identify the use of income averaging in debt financing and the freezing of debt collection required manual action by a member of staff at the agency, ”he said.

The agency announced a refund process at the end of May, after being previously revealed by The Guardian in March, and the money started flowing in July 2020.

Services Australia said debts generated using the illegal method which had been sent to external debt collectors were recalled “as soon as the debt was identified for repair”.

In a previous response to the ombudsman, the agency argued that it would have been confusing for clients to stop all debt collection because some people’s debts were legitimate.

He said he couldn’t just stop the collection of the faucets – thrown using the illegal method of “income averaging” – because each had to be manually identified by staff during a process. that took months.

But the mediator said he should have put a general pause on debt collection because it was unacceptable for the agency to continue to accept payments on debts which it “knew had a high probability of being. lifted for “legally insufficient” reasons “.

The ombudsman’s report also noted that the agency itself acknowledged that there were risks that some illegal debts were not identified by staff during its process.

Services Australia told the Senate inquiry in a response released Wednesday that 486 debts were subsequently identified upon further examination.

The responses also revealed that a robodette valued at $ 21,544.34 had still not been reimbursed to the victim.

The agency said this was because “the former client has yet to update their contact details”, although it is not clear whether the agency had managed to make contact to alert them of their right to reimbursement.

Services Australia said at a Senate hearing on Monday on estimates that it had reimbursed $ 724 million in robodet reimbursements, or 96.4% of all victims.

It comes as Federal Court considers $ 1.2 billion settlement with a class action lawsuit led by Gordon Legal on behalf of over 400,000 robodebt victims.

Hearings to review the settlement will be held in Federal Court on Thursday and Friday.

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