Thousands of welfare recipients impacted by the unlawful Robodebt scheme are due to receive a share of $475 million in additional compensation.
The settlement, agreed to by the Government this week, is the second round of Robodebt compensation payments.
A previous $1.8 billion package was distributed to victims between 2020 and 2022.
This settlement was appealed after the Robodebt Royal Commission discovered senior public servants had breached conduct standards multiple times.
Robodebt
Robodebt was a welfare debt collection system used by the Government from 2015 to 2019.
The system checked welfare recipients’ reported fortnightly income against the annual income they declared on their tax returns.
If this comparison suggested they had been overpaid, a debt notice was issued without human oversight.
Multiple errors with the system led to over $1.7 billion in debt notices being incorrectly issued. The scheme was later determined to be unlawful.
Royal Commission
A Royal Commission into Robodebt was launched in 2022. This is the highest form of inquiry a Government can pursue.
A final report handed down in 2023 linked the scheme to at least three deaths by suicide.
The Commission also found some senior public servants were aware Robodebt was likely unlawful, but covered up suggestions that it was illegal.
The final report criticised officials for giving “little thought” to the impact of the scheme on welfare recipients.
Compensation
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A previous $1.8 billion compensation package was distributed to victims between 2020 and 2022.
However, this settlement was appealed after the Robodebt Royal Commission uncovered shortcomings by public service officials.
The Federal Government has now agreed to provide an additional $475 million in compensation to settle the Robodebt class action appeal.
It will require final approval in the Federal Court.
Govt remarks
Labor has called Robodebt “illegal and immoral”.
It was not in power when the scheme was rolled out, and has regularly criticised the Coalition for overseeing its implementation.
Australia’s top legal officer, Attorney General Michelle Rowland, cited the Royal Commission’s findings that Robodebt was a ‘crude and cruel’ mechanism.
“Settling this claim is the just and fair thing to do,” Rowland said.
Reaction
Gordon Legal represented Robodebt victims in the class action appeal. It called the result “the largest class action settlement in Australia’s legal history.”
“If this settlement is approved, the class actions will have resulted in more than $2.4 billion [compensation].”
Greens Senator Penny Allman-Payne welcomed the settlement, but said “no amount of compensation can undo the pain and the harm” caused by Robodebt.
