Robodebt royal commission to review ‘untold harm’ caused by Coalition’s botched scheme

A former judge who led the Queensland floods inquiry will head up a royal commission into the Coalition’s botched robodebt scheme, with a report due by April next year.

The prime minister, Anthony Albanese, on Thursday announced Catherine Holmes would lead the royal commission into what he called a “cruel system”.

Holmes is a former chief justice of the supreme court of Queensland who led the Queensland floods commission of inquiry after the 2010-11 floods.

Albanese said the $30m inquiry would hand down its report in April 2023, labelling the robodebt saga a “human tragedy”.

“The royal commission will examine the establishment of the scheme, who was responsible for it and why it was necessary, how concerns were handled, how the scheme affected individuals and the financial costs to government, and measures to prevent this ever happening again,” he said.

Between 2015 and late 2019 the former government unlawfully accused 443,000 people of underreporting their income and therefore being overpaid benefits. Some 381,000 people paid back $751m in debts issued by the government which were found to be unlawful by a court.

Last year the former government agreed to a $1.8bn settlement that repaid money, including some interest, and wiped any outstanding unlawful debts.

That came after Guardian Australia revealed the Morrison government had received legal advice showing it would need to repay thousands of welfare recipients.

Some victims said the robodebt process damaged their mental health, led to their tax returns being garnisheed without warning, and saw them hounded by private debt collectors.

There have been at least three suicides that loved ones have linked to Centrelink debt recovery over the period the robodebt scheme operated.

“People lost their lives,” Albanese said on Thursday.

The former prime minister, Scott Morrison, apologised for the “hurt or harm” caused by the scheme but dismissed the need for a royal commission. Morrison was social services minister when the scheme was established.

Albanese said it would be up to the royal commission whether Morrison and other former ministers would front the inquiry.

From as early as 2016 there were warnings about the scheme from welfare recipients, some MPs, advocates and grassroots campaigners such as the Not My Debt group, which collated stories of the harm caused by the scheme and continues to provide advice to victims, including those still waiting for compensation.

The former government insisted for years that the scheme was legitimate, launched vicious attacks on critics of the program and suggested some welfare recipients might be jailed.

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It suddenly halted the scheme in November 2019 in response to a federal court challenge brought by Victoria Legal Aid and subsequently settled the class action led by Gordon Legal and launched by Labor’s then government services spokesman, Bill Shorten.

Shorten said on Thursday the scheme caused “untold harm”. He said one victim he had spoken to on Thursday had told how she attempted suicide, while another had been fleeing domestic violence in a refuge while she was hounded by debt collectors.

Asked if the commission might recommend further compensation for victims, the attorney general, Mark Dreyfus, said the commission had broad terms. He said the government wouldn’t preempt the inquiry’s findings.

Some victims were underwhelmed by the terms of the federal court settlement, which only paid interest on the debts they had paid to the government but did not compensate them for the effect the saga had on their lives.

“I feel like I got put back a couple of years in life because of this,” one victim, Nathan Kearney, told the Guardian in 2020 of the $6,500 he was wrongly accused of owing.

The government says the inquiry will also look at the handling of concerns raised about the scheme, including adverse decisions made by the administrative appeals tribunal.

Despite the about-face, the Coalition rebuffed calls to release information about the origins of the scheme, including which ministers and senior public servants were involved.

Welcoming the royal commission, Peter Gordon, a senior partner at Gordon Legal, said the firm hoped some of those documents would now be released.