The challenge
The government wanted to recover welfare overpayments more efficiently.
The case
From 2016, Australia's welfare agency used an automated system to compare people's welfare payments with yearly income averaged from tax records, and sent debt notices when the numbers didn't match. Because income often varies from week to week, the method wrongly flagged many people, and the burden of proof was put on them. A federal court found the debts unlawful, the government settled a class action worth about A$1.8 billion, and a 2023 Royal Commission called the scheme a 'crude and cruel mechanism'.
Why it didn't work
Automating a flawed legal method at scale turned an error into mass harm. Legal review, human oversight and listening to complaints early could have stopped it.
Sources
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