Hundreds of thousands of Centrelink "robodebts" are set to be reviewed by the Department of Human Services after the government backed away from a key element of its automated debt recovery program.
Government Services Minister Stuart Robert announced on Tuesday that averaged income data from the tax office would no longer be used as the only reason to raise a debt against a welfare recipient, and that previous debts raised in this way would be reviewed.
Mr Robert wouldn't apologise for the program or say the department had made mistakes, only that this change was a "refinement" of the process.
Around 570,000 debts have been raised since 2016 under three iterations of the automated debt recovery program. The department has told a Senate committee around 30 per cent of people didn't respond to letters asking them to explain their income, and a further 30 per cent don't finish after starting the process.
Mr Robert and Services Australia said only a "small cohort" of people would be affected by the change, and they would be contacted gradually as the cases were identified.
"The Department of Human Services is currently in the process of identifying the small cohort of people the refinement applies to, however, the group is limited to those who did not respond at all to requests for the clarification of discrepancies," a spokeswoman for the department said.
While critics of the program, commonly referred to as "robodebt," reacted with relief on Tuesday, many called for more information on just who would be affected and how the department would manage the workload of contacting those who had debts raised against them.
It's possible the change won't benefit those who did engage with the process over discrepancies in their income but averaging was still used as the basis for their debts.
Mr Robert said on Tuesday the changes to the system wouldn't change the onus of proof when determining a debt, but an internal email to staff said debts won't be raised without extra information
"As you know, in the past we have asked people to explain discrepancies to us," the email said.
"In the future, even if someone does not respond to these requests, we will seek more information to help us determine if there is a debt."
The announcement comes two weeks before the system was due to be tested in court, with two cases taken against the government by Victoria Legal Aid. It also comes as Gordon Legal prepares to bring a class action against the system.
Rowan McRae from Victoria Legal Aid said the announcement was welcome news for her clients who were weeks away from their hearing, but asked the government to work with them to improve the system.
"We are waiting for further details about the system changes to make sure that Centrelink's enforcement of unfair and flawed robo-debts are also addressed," she said.
The Community and Public Sector Union is concerned there won't be enough staff to implement the changes.
"Restoring human oversight to debt decisions is incredibly important, but the decision will mean nothing if there aren't enough permanent, properly trained staff to do this complex work," the union's national secretary Melissa Donnelly said.
"There is a huge backlog of robodebts that have already been generated and the department needs to be provided with more staff to get through this work. Robodebt has been an extraordinary mess, it will take a long time to unpick it and there's no way it can get done without proper resourcing."