Govt agrees to further $475m robodebt settlement
Record agreement takes total settlements from illegal debt recovery scheme to more than $2 billion.
The Albanese government has agreed to pay a further $475 million in compensation to robodebt victims in what it says is “the largest class action settlement in Australian history”.
The settlement is subject to approval from the Federal Court and comes on top of a $1.8 billion-plus payout handed down in 2020.
“The royal commission described Robodebt as a ‘crude and cruel mechanism, neither fair nor legal’. It found that ‘people were traumatised on the off-chance they might owe money’ and that Robodebt was ‘a costly failure of public administration, in both human and economic terms,” Attorney-General Michelle Rowland said on Thursday.
“Settling this claim is the just and fair thing to do.”
The original settlement in 2020 under the Morrison government had covered only interest on the money victims had been forced to illegally pay the government. It would have meant about half of robodebt victims got less than $100.
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Thursday’s decision means the government will not defend an appeal action brought by Gordon Legal relating to the original robodebt class action settlement.
The total deal amounts to $548.5 million, with up to $60 million set aside for administration and up to a further $13.5 to cover applicants’ legal costs.
Robodebt was an illegal welfare debt recovery program that started in 2015 that falsely accused recipients of owing money to the government.
It unlawfully claimed almost $2 billion from 433,000 people.
-more to come
