Albanese government axing external debt collectors in bid to prevent another robodebt

External debt collectors will no longer be used by the Albanese government as part of a pledge to ensure robodebt never happens again, the government services minister, Bill Shorten, has said.

After current contracts expire on 30 June the government will no longer use external debt collection agents ARL Collect, Milton Graham/Recoveries Corporation and Probe Operations to pursue alleged debts.

The government was forced to pay out $1.8bn in refunds to welfare recipients after conceding in a class action that income averaging was not a lawful basis to assert a debt.

Guardian Australia revealed in 2017 that the robodebt program resulted in an increase in the use of external debt collection agencies, with almost half of debts pursued in this way.

The robodebt program was effectively junked in November 2019. But in 2021 Guardian Australia revealed that nearly 1,000 robodebt victims had their debts sent to an external debt collector even after the government had admitted in court that the program was unlawful.

Shorten said that Services Australia will contact those with outstanding debts to transition them to a new process, offering flexible repayment options, short-term counselling, information and referrals to support systems.