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Families

Debts by Averaging

Australia's Robodebt scheme raised welfare debts by averaging people's yearly income across the year, wrongly showing many as overpaid. Hundreds of thousands were chased for money they did not owe.

WhereAustralia

WhenAbout 2015 to 2019

SystemRobodebt income averaging

Who it reachedWelfare recipients and their families

All Community Voices

The question it leaves

When an automated shortcut is wrong, who has to prove it: the government, or the person who opens the letter?

What happened

From about 2015 to 2019, the Australian government raised welfare debts automatically using a method called income averaging. It took a person’s yearly income from tax office records, spread it evenly across the year, and compared that average with the income the person had reported while receiving benefits. Anyone whose pay was irregular, such as casual workers, students, or people moving in and out of work, could look as if they had been overpaid when they had not been. Debt notices went out to hundreds of thousands of people.

Who spoke up

People who received the debts, and their families, pushed back through a public campaign under the name #notmydebt, through test cases, and through a class action. In 2019 a test case brought by Deanna Amato led the government to concede that debts raised this way were unlawful. At the Royal Commission that followed, people described what the debts had done to them, including a mother whose son died after being told he owed money.

What changed

In June 2021 the Federal Court approved a settlement of the class action, covering about 648,000 people: A$112 million in compensation including legal costs, about A$1.76 billion in debts withdrawn, and about A$751 million in refunds. The judge described it as a shameful chapter in the administration of social security.

In July 2023 the Royal Commission into the Robodebt Scheme, led by Catherine Holmes, delivered its report. It called the scheme “a crude and cruel mechanism, neither fair nor legal.” A second settlement, with A$475 million in compensation, was approved by the Federal Court in June 2026.

What to keep straight

Headline figures for the first settlement vary, from A$1.2 billion to A$1.8 billion, because they combine cash, refunds, and cancelled debts. The cash compensation was A$112 million.
There have been two settlements, in 2021 and 2026.
The scheme was about welfare, not schools. It is here because it reached students, young people, and families in the same way it reached everyone else.

Talk about it

People were asked to prove they had not been overpaid. Who should carry the burden of proof when a computer says you owe money?
Averaging is a reasonable shortcut for some purposes. Why did it fail here?
What would you need to see before trusting a letter that says you owe money?

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