Nathan Kearney says he lost two and half years of his life to robodebt. He’s still seeing a counsellor about it.
Four years ago he was living in Brisbane, seeing and playing gigs, working several different casual jobs and generally enjoying his 20s.
Then the debts came, first for about $2,000, and a year later for $4,500. It was the same story: you have underreported your income, you owe us this much money, please provide us your old payslips. He couldn’t.
Overwhelmed by the idea he now owed the government more than $6,000, Kearney moved back in with his parents in East Gippsland.
He was 27, dreams on hold, while he worked 50 hours a week in a country town he didn’t like just to regain a sense of financial stability.
“I feel like I got put back a couple of years in life because of this,” Kearney says. “And I would be closer to where I want to be at 31 years old if it hadn’t been for robodebt.”
On Monday the government reached a settlement with Gordon Legal, a law firm running a class action on behalf of hundreds of thousands of people caught up in the Coalition’s government welfare debt recovery program.
The settlement was for an eye-watering $1.2bn but almost all of the money came from the government’s May announcement to repay and wipe debts raised using the unlawful “income-averaging” of ATO pay data.
In fact, the only new figure was $111m in compensation that will be shared between about 430,000 victims.
The sums will vary significantly, depending on how much debt people had paid and how long they’d been without their money. Legal costs, which will be deducted from the compensation, are yet to be determined.
Many people have flooded victims’ group Facebook pages, as well as Gordon Legal’s own page, to express frustration at the compensation figure, which they feel does not reflect the pain or suffering the four-year program caused.
Moreover, some are angry that a scandal they see as being punctuated by continual cover-up and obfuscation never made it to a courtroom.
“I wanted to know why those ministers felt that it was appropriate to use this illegal system and to target the most vulnerable people,” Kearney says. “I wanted somebody to ask them to their faces: ‘Why did you think that it was OK to take money from the poorest people without giving them a chance to argue their case?’”
Others, like Jennifer Miller, whose son Rhys Cauzzo took his life when he was 28, say they intend to object to the settlement, which will need to be approved by the court. “There has been no accountability whatsoever,” Miller says.
Cauzzo lived with depression and anxiety but Miller believes the financial pressure that came from two Centrelink debts tipped him over the edge on Australia Day 2017.
Along with Kath Madgwick, whose son also took his life after receiving a Centrelink debt, Miller has been campaigning against the robodebt scheme for three years.
Like Kearney, she is insistent the case should have gone to court. “This isn’t over,” she says.
Gordon Legal emphasised this week that the settlement – an “excellent outcome” for clients and group members – should be viewed in its full context.
“When you think about the totality of what’s been achieved since the proceedings were commenced, that really amounts to more than $1.2bn,” said a partner at the law firm, Andrew Grech.
It was the Amato case brought by Victoria Legal Aid that established the legal precedent that ruled that robodebt’s “income averaging” unlawful.
But in the months afterwards, the government simply stonewalled. It said nothing about refunds and claimed only a “small cohort” of people had been affected.
Indeed, the refund decision in May, which Guardian Australia revealed two months earlier, was prompted by the need for a strategy to respond to the Gordon Legal class action.
In the lead-up to Monday’s announcement, it was clear that a settlement was looking likely.
And the $111m figure was said, from the government’s perspective, to represent the interest owed, rather than compensation for stress or anguish.
The government services minister, Stuart Robert, later publicly confirmed the government’s view of the compensation, noting it was for “the most part, for interest payments for money held”.
The commonwealth “has not accepted or admitted any liability in the matter”, Robert noted.
Though victims longed for their day in court, the two-week trial promised to be a fairly dry affair based mostly on documentary evidence and legal arguments.
The government did not plan to call any witnesses, so there was little prospect the former human services minister, Alan Tudge, or top departmental officials would need to take the stand.
In addition, the government’s prospects advice from earlier in the year said while it was likely a court would order refunds, plus interest, Gordon Legal’s negligence claim was unlikely to succeed.
Still, for some victims, the government’s lawyers would have been there in the “virtual” courtroom, defending their case.
Gordon Legal’s statement of claim, for example, alleged Centrelink was well aware of the distress the program had caused victims.
Kearney says it was the second debt that caused his mental health to plummet (he lives with chronic depression). He also fell out with some friends, though he notes they’ve since patched things up.
Because he continued to contest his debts, Centrelink eventually sent them off to a private debt collector who would call him three times a day.
Centrelink also garnisheed nearly $3,000 from his tax return.
“Once they [the debt collectors] started calling, they … put you into a certain headspace, which is like a shame and guilt spiral,” he says. “Whether or not you deserve to feel the shame or guilt, it’s still there within me.
“Sometimes they’d call and I’d tell them, like, ‘I can’t deal with this any more. I’ve been thinking about taking my life,’ and things like that. It didn’t change anything.”
Perhaps as many as 100,000 people were also left out of the refunds because they provided payslips or bank statements after being hit with an initially unlawful debt. It was then recalculated and a debt was substantiated.
And Gordon Legal, which had initially argued these debts were “tainted”, dropped that claim in the settlement.
Some of those people expressed anger and confusion at that outcome in conversations with Guardian Australia this week.
Other refund recipients, like the man who told the Guardian his debt had been a factor in his marriage breakdown, may only get the sense of justice they seek from a royal commission, as proposed by Labor and the Greens.
“I’ve been seeing somebody to actively to talk through, I guess, ‘robodebt-related trauma’ is the way that they put it, and slowly coming to terms with it,” says Kearney, who is now back in Brisbane.
He used to fear another debt might arrive at any moment.
“Now, with the settlement, it does feel like, ‘Everything’s gone back to normal, they’ve made penance … and everything goes good again,’” he says. “Whereas I think a lot of us are still dealing with the impacts of what they did years ago, even if we got our refunds.”
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