The mother of a young man who died by suicide after being targeted by Australia’s robodebt scheme has been told she is ineligible for compensation under a $475 million settlement related to the government’s unlawful debt recovery program.
Kath Madgwick’s son, Jarrad, 22, died in 2019 after receiving a provisional notification from Centrelink indicating he owed nearly $2,000. Madgwick said she is experiencing “injustice of another kind” after federal lawyers informed her she would be excluded from the historic class action settlement because Jarrad never received a formal debt notice before or after his death.
Jarrad was contacted by Centrelink in May 2019 requesting payslip details as part of a review triggered by an apparent discrepancy between his declared earnings and Australian Taxation Office income data. After providing the information, he was told via his MyGov online account that a provisional debt of $1,795.85 had been determined for the period between April and June 2018. Two days later, Jarrad expressed concern to his mother that the debt would prevent him from receiving the Newstart allowance he was applying for. That same evening, he died by suicide.
The subsequent royal commission into the robodebt scheme highlighted Jarrad’s case, noting the manner in which he was informed about the potential debt was a “precipitating factor” in his death. However, Madgwick was told recently by commonwealth lawyers that their settlement eligibility criteria exclude her family’s claim because no official debt notice was issued. Centrelink’s administering agency, Services Australia, also disputes that Jarrad’s estimated debt arose through the unlawful income averaging methodology that underpinned robodebt’s illegality—a key factor in the settlement.
Services Australia acknowledged the royal commission’s findings regarding the profound impact of robodebt on individuals and families but maintained that Jarrad’s provisional debt was not calculated using income averaging. A spokesperson explained that eligibility for compensation hinges on whether the debt was raised through this specific method, and asserted Jarrad’s case did not meet this criterion. The agency noted it has since implemented improved communication and support pathways to assist vulnerable customers affected by debt reviews.
The $475 million settlement, announced last year and scheduled to begin payouts in December, follows an appeal on behalf of some 450,000 claimants. It extends compensation to those who suffered economic loss, distress, or psychiatric conditions linked to the scheme, including in certain circumstances close family members of deceased victims.
Madgwick has expressed ongoing frustration and grief, saying the decision to exclude her family adds to the injustice of her son’s death. “I just want them to admit what they’ve done to my son… to start to take responsibility for their errors, and to ensure that this doesn’t happen to somebody else again,” she said. “My son was innocent. He’s lost his life. I’ve lost him.”
Robodebt, a controversial automated debt recovery program, was ruled unlawful after it was found to rely on flawed income averaging, resulting in numerous erroneous debt notices that caused financial and emotional harm to many Australians.