Australia 'robodebt' welfare debt recovery

The Australian government's Robodebt (or Online Compliance Intervention (OCI)) scheme was a highly controversial automated debt recovery system that replaced a manual system of calculating overpayments and issuing debt notices to welfare recipients.

Launched in July 2016, the OCI data-matching system automated much of the investigation and debt raising process where Australia's Department of Human Services detected a discrepancy between the amount of income a citizen declared in a year with averaged fortnightly income data from the Australian Taxation Office (ATO).

The new system, according to then Prime Minister Scott Morrison, would increase the 'number of fraud investigations and compliance interventions by over 900,000 over four years', saving AUD 1.8 billion. 

After years of complaints, legal actions, and official inquiries, the Australian government announced it would terminate the OCI scheme in May 2020 and repay 470,000 wrongly-issued debts in full.

Operator: Department of Human Services/Centrelink
Developer: Services Australia
Country: Australia
Sector: Govt - welfare
Purpose: Recover overpaid welfare payments
Technology: Robotic Process Automation (RPA)
Issue: Accuracy/reliability; Fairness; Privacy
Transparency: Governance; Black box; Complaints/appeals; Marketing; Legal

Risks and harms 🛑

Australia’s Robodebt scheme has been criticised for causing financial distress, mental health issues, suicides, and a lack of access to justice, largely due to its flawed algorithm and illegal practices.

Unfair and 'illegal' debt demands

Complaints quickly started to be made about the OCI scheme after its launch to organisations such as legal advisory service Victoria Legal Aid, with citizens saying they were being hit with year-old debts and given three weeks to provide documents to prove they had not been overpaid. 

Government officials denied widespread problems with the scheme, and started a public campaign to rebut stories in the media which accused the OCI of producing unfair and possibly illegal outcomes. 

Ombudsman inquiry

In January 2017, former senior assistant commonwealth ombudsman Louise Macleod led an inquiry into the OCI. Per The Guardian, the April 2017 report listed some process issues with the scheme but was muted on the issue of income averaging and completely silent on legality. 

But internal emails later shared with the Royal Commission questioning the legality of the scheme were shown to have been withheld from her investigation.

Legal, regulatory 👩🏼‍⚖️

Investigations, assessments, audits 🧐

Page info
Type: System
Published: March 2023
Last updated: January 2024