Report to the Royal Commission into the Robodebt Scheme

This report has been prepared at the request of the Royal Commission into the Robodebt Scheme. The assumptions of fact are set out in annexure A to the letter of engagement. This report sets out my responses to each of the issues raised in the letter of engagement, which are as follows:

(a) The role of income-testing in Australia and how it relates to accuracy of payments and therefore potentially to customer debts;
(b) Major policy developments designed to encourage social security recipients to work parttime and therefore combine earnings and benefit receipt;
(c) Developments in the labour market that have increased the overlap between receipt of benefits and part-time earnings;
(d) What is known from population level data about transitions between social security and work, both at a point in time and within and between years;
(e) What is known from administrative data from the DSS and Services Australia about transitions between social security and work, both at a point in time and within and between years;
(f) Whether the use of data based on the assumption that a Recipient's income can be averaged over an annual period to identify 'over-payments' is consistent with policy directions in the social security system with respect to encouraging work by Recipients;
(g) Changes in the Patterns of Recipient Earnings and Patterns of Recipient Employment in the period 2010-2015, prior to the introduction of the Scheme, and 2015-2019;
(h) The Patterns of Benefit Engagement in the period 2010-2019;
(i) The nature of Labour Force Patterns, particularly for low-income earners and Recipients, in the period 2010-2019;
(j) Assess in light of those characteristics whether the assumption underlying income averaging — that incomes are consistently earned with little variation between fortnights — could be regarded as reasonably accurate or as a reliable measure of fortnightly income;
(k) Whether any concerns identified in relation to income averaging would or should have been identifiable in 2015 based on the available Information Resources on Recipient Patterns, Income Volatility and Labour Force Patterns;
(I) Subsequent analysis about whether legislative changes before the introduction of the Scheme or subsequently to make income averaging lawful would be consistent with the long-standing policy to encourage social security recipients to work part-time; and
(m) Any other matter of substance I consider relevant to the terms of reference, based on my expertise and knowledge with respect to income support policy or practice.