The Curious Case of Robodebt in Australia

Governments around the world are looking to digital technology and data matching as tools for better compliance. But as they consider their implementations, they would do well to take note of the fiasco of the Australian Government’s ‘robodebt’ initiative.

In November, a Federal Court challenge to the ‘robodebt’ system was upheld, plunging the Government’s policy into chaos and prompting an uncharacteristic back down from Federal Ministers who have continually insisted the process – introduced in 2016 to claim back overpayments for social security benefits - was fair.

The case showed how the technology was delivering error-filled results, which, because they were considered infallible by the Government, led to many vulnerable people being harassed for debts, many of them had not actually incurred.

“It was a deliberate policy of algorithmic cruelty, instituted on the orders of human bureaucrats,” said Asher Wolf, a prominent digital rights campaigner who has lobbied against ‘robodebt.’

Disappearing Money

The court challenge was brought by a Victorian woman – Deanna Amato. According to the ‘robodebt’ system, she had been overpaid during the 2012 financial year and owed AUD 2,754 to the Government.

The first she knew of this was when instead of receiving an AUD 1,709 tax refund for 2018, the money disappeared as the Government garnished the refund as part payment of her debt.

Amato’s challenge was a test case for the legality of the ‘robodebt’ system. It automatically calculated overpayments through data-matching estimates of averaged fortnightly earnings, but only by calculating overpayments based on overpayments over relevant pay fortnights.

The data matching system compared income declared to the Australian Taxation Office with the income they declared to Government welfare agency Centrelink.

In the event of a discrepancy, people were asked to provide payslips to prove their earnings. If there was no response, their income was averaged across the year, and a debt calculated.

Computer-generated letters were sent out, without any human screening, and the onus of proof was on the welfare recipient to prove they were not overpaid, and not on the Government to show they were.

Tragedy of Averages

Critics have long claimed that this process of 'averaging' often delivered an incorrect view of people's incomes, particularly in cases where people work casually or part-time, and their income varies over a year.

Nevertheless, the Government pressed ahead with the scheme, which claimed around 500,000 alleged debts across the social security system. The Coalition parties, currently in Government and advocates for the scheme, claimed it would deliver cost savings of AUD 2 billion over four years.

The tragedy of 'robodebt' is that, for many people, the system said were liable, it was always about more than money.

According to activists, at least 2,030 people who received debt notices died after receiving notices between July 2016 and October 2019, and of these 429 were under the age of 35.

There are claims that, in some cases, the debt notices tipped people over the edge and towards suicide.

For its part, the Government – through the Human Services Department which administered the scheme – claims to be “refining” the system and has refused to apologize.

It has been ordered to pay Amato her tax refund, along with AUD 92 in interest, and cover her court costs.

That is unlikely to be the end of the matter because an estimated 4,000 people hit by 'robodebt' notices have signed onto a class action launched by leading law firm Gordon Legal.

Thousands more are likely to sign up now, in the wake of Amato’s court victory.

The Government recently announced that Infosys had won a contract to rebuild the 30-year-old engine, which calculates welfare payments, one of the core components of the 'robodebt' data matching.

That may deliver more accurate results and faster, but the problems of ‘robodebt’ were also around policy and governance.

The idea that people had to prove the system wrong, rather than putting the onus onto the system, is complete anathema to the Australian legal system and morally repugnant to many people, particularly when applied to a section of society which is more vulnerable and less educated.

Unlawful Numbers

From a legal standpoint, the court judgment has also ruled that the averaging process used by the system was unlawful – a decision that undermines the very basis of the whole project.

Very few people in Australia would argue against the Government’s right to recoup overpayments of any kind. Welfare cheating is not popular.

However, the way the Government implemented its policy has exposed as faulty, an error compounded by its refusal to back down in the face of criticism.

The warning bells are there for the idea of digital tools for government agencies, and the lessons also resonate across the private sector.

Data analysis can only get us so far because, ultimately, the rules are written by humans.

In this case, humans provided a bad set of rules and then – when the technology delivered outcomes – humans claimed these outcomes were infallible because they were created by machines.

There’s an obvious lesson in that, and let’s hope the Australian Government – and those watching this initiative – can learn and move on.

Otherwise, digital government initiatives will be seen to be more about surveillance and oppression than efficiency and fairness.