An age pensioner who was initially told she had one month to pay back a $65,000 robodebt will “never get over” what happened to her, a royal commission has heard.
The commission is investigating why and how the unlawful Centrelink debt recovery scheme was established in 2015 and ran until November 2019, ending in a $1.8bn settlement with hundreds of thousands of victims.
Appearing at the inquiry on Monday, age pensioner Rosemary Gay recalled feeling “sheer terror” after reading an October 2016 letter which said she owed Centrelink $64,998.17 in overpaid welfare benefits.
The letter, shown to the royal commission, noted the due date for recovery was 12 November 2016 and said if she could not pay by then she should contact Centrelink.
“It turned my life upside down,” Gay said. “I’ve never earned that much money, how could I owe that much money? And the fact I was to come up with it within a matter of three or four weeks, it was sheer terror.”
Gay told the royal commission she feared she might have to sell her house and lose “everything I had worked for”.
She contacted Centrelink by phone to challenge the debt, but told the royal commission on Monday a series of officers at the agency were unable to explain the massive debt.
Eventually, a top official – described colloquially by another Centrelink staff member as the equivalent of “God” – told her there appeared to be a “glitch”.
After an initial review, the debt was reduced to $6,600, though Gay requested a second review because she was sure that figure was also wrong.
“My mental state and physical health were at a very low ebb,” she said.
Two months later, in December 2016, Gay received a new letter saying the debt had been reduced to $120.
“I was a shocked and angry by this time to think they could initially cause such a traumatic experience to anybody accessing support from a pension,” Gay said.
In 2020, after the Coalition government had wound up the scheme and accepted it was unlawful, Gay was told by Centrelink she would get a refund of that $120.
The debt was calculated using the “income averaging” method, which had been found to be unlawful by the federal court. The process involved using a person’s annual income reported to the tax office to assess whether a person had accurately reported their fortnightly employment earnings to Centrelink.
“I just think it was immoral that it took them that time to admit that they made that mistake,” Gay said.
“Everybody needs to understand how many thousands of people were affected so badly by a system that was put in by a government department who you have full trust in that they are doing things correctly, when obviously they are not.
“It will continue to remain with me forever. It’s just something I will never get over and it has had a huge impact on my physical and mental wellbeing.”
The royal commission was shown documents on Monday that suggested Gay’s initial debt was caused by human error through the double counting of income she’d reported to Centrelink.
This was one of several issues raised by Centrelink worker Colleen Taylor, whose complaints about the scheme were broadly dismissed by the agency’s top officials in 2017.
The inquiry continues.