The Income Compliance Program employed income averaging to determine both income levels and eligibility for benefits. In 2016, an automated system known as “Online Compliance Intervention” replaced manual debt assessment and verification, significantly increasing processing capacity from what previously constituted a year’s workload to about 20,000 debt notifications per week.
By early 2017, media coverage had highlighted numerous instances of incorrect debts being raised, with affected individuals only becoming aware when notified by debt collectors. Under the revised policy, recipients disputing a debt were required to supply documentation to refute it, reflecting a significant shift to a reverse onus of proof.
In June 2017, the Community Affairs References Committee delivered a report following an inquiry into improved management of the social welfare system. One of its recommendations was to pause the Income Compliance Program, a proposal not adopted by the government.
Despite substantial public criticism, the scheme continued until November 2019, when the government announced that income averaging would no longer be solely used to establish debts and that collections based on such calculations would be suspended. That same month, a Federal Court ruling found income averaging insufficient for establishing debt existence.
On 4 December 2019, the issue was referred to the Community Affairs References Committee. During the course of its inquiry, the Committee received 78 written submissions and conducted 10 public hearings. At one hearing, Services Australia was asked multiple questions regarding legal advice pertaining to the program. The minister claimed public interest immunity over this advice, prompting the committee to issue its first interim report on 11 February 2020. The report rejected the minister’s claim and recommended that the Senate order responses to be provided to all outstanding questions – a recommendation which the Senate adopted.
Further interim reports continued to dismiss assertions of public interest immunity and recommended that the Senate require relevant ministers to table the requested documents. These reports also included recommendations for enhancing communication about debt repayments, increasing staffing levels for refund outreach, reviewing evidence requirements for debt establishment, and distributing settlement funds resulting from a 2019 class action resolved by the government in 2020.
The committee's final report, presented on 13 May 2022, made a single recommendation: the Commonwealth Government should establish a Royal Commission into the Income Compliance Program. Following a change of government in 2022, this recommendation was adopted, and the Royal Commission into the Robodebt Scheme was officially established on 18 August 2022.
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