Court approves $112 million payday for Centrelink robodebt victims

Australians affected by the government’s controversial Centrelink robodebt scheme are set to receive a refund. On Friday, the federal court approved a $112 million settlement between the Commonwealth and the victims of the Coalition’s bungled robodebt scheme, which unlawfully forced thousands of Aussies to pay the government department money they didn’t owe.

Justice Bernard Michael Murphy said in his ruling the robodebt scheme was a “shameful chapter” in Australia’s history, as well as a “massive failure” in public administration.

“The proceeding has exposed a shameful chapter in the administration of the Commonwealth social security system and a massive failure of public administration,” he told the court, The Sydney Morning Herald reports.

“One thing, however, that stands out from the objections is the financial hardship, anxiety and distress, including suicidal ideation, and in some cases suicide, that people … say was suffered as a result of the robo-debt system.”

Law firm Gordon Legal, which ran the class action against the government, said it would start the process of distributing the compensation, which could range from hundreds to thousands per person.

Thousands of Australians were automatically included in the class action, which means you could be one of the many set to receive a chunk of change from the government. So how can you tell if you’re part of the legal claim?

According to Gordon Legal, you’re a part of the class action if you were in receipt of one of the following Social Security payments:

• Newstart Allowance
• Youth Allowance
• Disability Support Pension
• Austudy Allowance
• Age Pension
• Carer Payment
• Parenting Payment
• Partner Allowance
• Sickness Allowance
• Special Benefit
• Widow A Allowance
• Widow B Pension

AND

If at any time after April 2015:

You received or were sent Centrelink letters or other correspondence or notifications which requested that you check, confirm or update employment income information; and
Following this, Centrelink asserted that you owed a debt and demanded repayment of the debt; and

AND

You have paid, or had recovered from you, any debt or part thereof (including through a payment plan, garnishing of tax return or payment of the debt in full).

Robodebt – aka the Income Compliance Program – refers to an averaging process used to calculate debts owed by welfare recipients. It worked by matching averaged data from the Australian Tax Data (ATO) with income reported to Centrelink. However the scheme came under heavy fire, with critics arguing that it did not work and was sending out automated demands for money from people who did not actually owe the government.

The court was told under the controversial scheme, which ran between 2015 and November 2019, the federal government unlawfully raised $1.76 billion in debts against 443,000 people. The $112 settlement will be shared between around 394,000 victims. The move comes a year after Services Australia waived 470,000 individual debts, totalling more than $721 million.

In November 2019 the federal government made the decision to no longer rely solely on averaging of ATO data to slap welfare recipients with debts, instead requiring additional proof to do so. At the time it was also confirmed that a review into all robodebts that used averaging alone would be carried out.