Government agrees to $1.2 billion settlement to end Robodebt class action

Nov 16, 2020
A settlement for the Robodebt class action has been agreed to on the day the trial was due to start. Source: Getty.

The Federal Government has agreed to a settlement of $1.2 billion over its unlawful Robodebt scheme. If approved by the Federal Court, the settlement will include an additional compensation payment of $112 million to be paid to 400,000 former welfare recipients as well as other debts being wiped.

In May, the government announced it would refund $721 million to more than 370,000 people who had debts collected under the controversial Robodebt scheme that ran from June 2015 until 2019. The scheme was heavily criticised and eventually deemed unlawful for using computer algorithms to raise automated debts against hundreds of thousands of welfare recipients with minimal human oversight.

On Monday, the government agreed to a settlement announced by Gordon Legal, the law firm representing the affected people, saying that, if approved by the Federal Court, the government was to pay an additional $112 million in compensation on top of the previously agreed $721 million as well as wipe a further $398 million in debts that were wrongly raised. The case was set to go to trial today.

Gordon Legal went to on to say that if approved, a scheme would be put in place to assess compensation claims by those who believed they were owed money with the amounts being paid to the people in 2021. The law firm added that in settling the class action, the Commonwealth had not admitted that it was legally liable.

When asked today if he would apologise for the scheme, Prime Minister Scott Morrison declined to do so but referred reporters to his comments in Parliament earlier this year where he apologised for any “hurt or harm” it caused. He added that his government has been focussed on “making this right” saying that more than $700 million of the $720 million had already been repaid.

“Remember these payments have been made at the same time that working through government services and our agencies we’ve had to enlist some 1.6 million Australians on to JobSeeker… but for us to still follow through on the commitments we made here to make the right, we have done exactly that and the settlement announced today is a further demonstration of that.”

Meanwhile shadow minister for government services Bill Shorten said that Labor would continue to push for a royal commission into the botched scheme adding that it shouldn’t have taken the government four years to recognise the program was flawed.

“Today it means that 400,000 victims of the Government’s illegal protection racket … these people have got some justice,” he said. “This is a good day for them, but I think the rest of Australia, and the people who were damaged by this process can say: ‘who was responsible?’ I wish they had done their homework. It shouldn’t have taken until the day of the court hearing for the Commonwealth to come good.”

In October, Services Australia, the government sector in charge of the Robodebt scheme, faced questioning regarding their decision to continue the program despite warnings it was unlawful dating back to 2017. Senate estimates heard that at the time, out of the 6 per cent of Australians who were yet to have their debts paid or refunded, 3,300 of these were belonging to deceased estates.

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