The Government will deliver $112 million in compensation to around 400,000 Australians after settling a major robodebt class action.
The Gordon Legal Class Action alleged the Government’s automated debt recovery system levied debts based on inaccurate income average processes.
Pending Court approval, the Commonwealth will pay $112 million in compensation including legal costs to members of the class action, on top of the $720 million the Government is already repaying in wrongfully collected debts.
The Government will also drop claims for another $398 million in debts it had asserted against some of the class action group members, taking the overall robodebt bill to $1.2 billion.
In settling, the Commonwealth has not admitted that it was legally liable.
Following the settlement, Prime Minister Scott Morrison said the Government has already been making amendments, noting the $720 million that is currently being returned.
"What we had been doing most importantly is we have been settling those payments," he said.
However Gordon Legal partner Andrew Grech said that while the money was fair, no amount would “ever compensate” for the hardship Australians had been put through.
"We've listened intently over a long period of time now to the more than 70,000 people that have contacted us and there are some really dreadful stories you hear through that process."
Labor frontbencher and vocal robodebt critic Bill Shorten said Australia still needs a Royal Commission into the scheme, saying the Government had ignored claims that robodebt was illegal and unfair.
"Why should people have to go to lawyers, put together a class action just to get the government to obey the law?"
Long road to settlement
The Government announced it would refund 470,000 debts worth $721 million in May this year, months after it officially scrapped the controversial program in November 2019.
The Government will now only chase up a welfare debt once a human officer has double-checked Centrelink’s automated calculation.
Originally, the robodebt or “Online Compliance Intervention” system compared Australian Tax Office income data with welfare payments. However, critics said the scheme was flawed and resulted in thousands of incorrect debt notices.
The Federal Court also declared the debt raising program illegal in November last year.
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