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Robodebt class action settles for $1.2bn

By Tony Zhang
  • November 17 2020
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Robodebt class action settles for $1.2bn

By Tony Zhang
November 17 2020

The federal government has agreed to a  “landmark” class action settlement worth $1.2 billion over its controversial robodebt recovery program, which raised automated debts against welfare recipients.

Robodebt class action

Robodebt class action settles for $1.2bn

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By Tony Zhang
  • November 17 2020
  • Share

The federal government has agreed to a  “landmark” class action settlement worth $1.2 billion over its controversial robodebt recovery program, which raised automated debts against welfare recipients.

Robodebt class action

The robodebt scheme has been widely criticised for using computer algorithms to raise debt against hundreds of thousands of Australians who are on welfare with little human overbite.

In May, the government indicated that it will be taking steps to refund $721 million from 470,000 debt notices – affecting 373,000 Australians – raised wholly or partially through its controversial robodebt scheme.

Stuart Robert MP, in his role as the minister for the national disability insurance scheme and minister for government services, released a statement at the time that said “the Morrison government takes its responsibility for upholding the integrity of Australia’s welfare system seriously”.

While Prime Minister Scott Morrison apologised in Parliament for “hurt or harm” caused by the process back in May.

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Yesterday’s settlement includes that amount, plus $112 million in compensation and a decision to drop a further $398 million in debts wrongly raised.

Gordon Legal, which represented the Centrelink recipients who had been forced to pay back money under the “unlawful” scheme, said the parties had reached an agreement which, if approved by the Federal Court, will see $1.2 billion in total delivered to participants in the legal challenge since it started, including $112 million in compensation. 

The firm noted that, in settling the class action, “the Commonwealth has not admitted that it was legally liable to group members”.

“We want to acknowledge the courage of the lead applicants; Katherine, Elyane, Steven, Felicity, Shannon and Devon, who led these proceedings on behalf of all robodebt victims in pursuit of this class action, which has allowed this outcome to be achieved today,” Gordon Legal partner Andrew Grech said.

“Our clients have asked us to especially thank Bill Shorten for his relentless pursuit of this issue, for his compassion over the last four years for vulnerable Australians hurt by robodebt and for bringing the case to Gordon Legal’s attention when it seemed that all other options had been exhausted and only resorting to the legal system would help.”

Mr Grech further acknowledged the work of the legal team at Victoria Legal Aid, whom he said worked tirelessly to bring a number of individual claims before the Federal Court before the class action was commenced, as well as the efforts of many community legal services in the Welfare Rights Network, such as Social Security Rights Victoria, who have been advocating for victims of robodebt for the last few years.

Shadow minister for government services Bill Shorten said in a statement that Labor would continue to push for a royal commission into robodebt.

The class action, launched on behalf of people who received notices through the automated debt recovery process, was launched last year with senior partner Peter Gordon making the announcement along with Mr Shorten. It comes after pressure over the federal government’s “15,000 mistakes” borne out of the automated system.

Services Australia began rolling out $721 million in refunds for the illegal scheme from July 2020.

Are you entitled to a refund from the scheme? Here’s what you need to do

Robodebt class action settles for $1.2bn
Robodebt class action
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