The Federal Government has moved to rid Services Australia from the type of outsourcing of welfare debt collection that led to the debacle of Robodebt.
Government Services Minister Bill Shorten is ending the association his department has with three external contracting agents.
Transitioning is underway, with the cleanout to be complete by the end of this financial year.
Insisting the Labor government will ensure Robodebt never happens again, Mr Shorten said the cessation of outsourcing social security welfare payment debts to external collection agents was just one step away.
All debt recovery will now be done in-house through Services Australia staff.
From 30 June, Services Australia’s final contracts with debt collection agents ARL Collect, Milton Graham/Recoveries Corporation and Probe Operations will expire.
ARL Collect is wholly owned by Panthera Finance Group, which was successfully prosecuted in 2019 by the Australian Competition and Consumer Commission for “unconscionable conduct”.
All outstanding debts will now be transitioned in-house over the coming months, with Services Australia collection agents contacting those affected to assist them in that process.
Flexible repayment options, short-term counselling, information and referrals to support systems may be provided.
Mr Shorten said the process of raising debts needed to be lawful, customer focused and handled with care and respect.
“We have to look at the reality of who is affected – it’s often very vulnerable Australians, people who have gotten on government payments in the first place because they are at a vulnerable time in their lives,” the Minister said.
“We have to stop giving their information to private companies and ensure the debt recovery process is lawful, fair and transparent.
“The Royal Commission into Robodebt has put on full display the unfettered cruelty with which debt collection agencies were unleashed against vulnerable Australians. We cannot let this happen again.
“We are not naïve to the fact that wherever there is government money, there will be some opportunistic behaviour – but Services Australia is already fully capable of recovering debts and has multiple tools at hand.
“However, the power to raise lawful debts against citizens needs to be exercised judiciously and at every stage afford citizens the right of reply and not reverse the onus of proof from the government to the individual.
“Government should never start from the position that the existence of an alleged debt means the citizen is guilty until proven innocent.”
The illegal Robodebt automated debt assessment and recovery program began in 2016 and became hugely controversial due to its incorrect calculations and false debt notices being sent to welfare recipients.
It became the subject of numerous inquiries, leading the Coalition government to scrap the scheme in 2020 and promising to repay 470,000 wrongly issued debts.
Following Labor’s election victory last year, Prime Minister Anthony Albanese established the royal commission into the matter.
More than 70 witness hearings were held by the inquiry during over 30 days of evidence delivered across four bulk sessions.
Bureaucrats, legal heads, former ministers and victims of the scheme were called to give evidence to the inquiry.
Royal Commissioner Catherine Holmes’s report is due by 30 June.