The federal government will pay victims of the Robodebt scandal an extra $475 million in compensation in what is the largest class action settlement in Australian history.
The settlement is the second to come out of the Robodebt saga, following a compensation payout of $112 million in 2020.
The government says the size of today’s settlement reflects “the harm caused to vulnerable Australians by the heartless and disastrous policies of the former Liberal government”.
Robodebt was an unlawful Australian government debt recovery scheme that began in 2015. It used flawed automated data-matching to falsely claim welfare recipients owed money to the government.
The settlement announced today also sets aside up to $60 million to administer the settlement scheme and $13.5 million to cover the applicants’ legal costs.
Federal Attorney-General Michelle Rowland said the settlement was “the just and fair thing to do”.
“Today’s settlement demonstrates the Albanese Labor Government’s ongoing commitment to addressing the harms caused to hundreds of thousands of vulnerable Australians by the former Liberal government’s disastrous Robodebt Scheme,” Rowland said.
“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’.”
In 2023, a scathing report was released by the Royal Commission into the Robodebt Scheme.
The Commonwealth government had first settled the Robodebt case in 2020 but an appeal was launched for further payouts following the release of the Royal Commission into the issue. It brings the total compensation to $587 million ($112 million from 2020 and $475 million today).
At a press conference, Peter Gordon from Gordan Legal said today’s compensation settlement was “vindication and validation” for hundreds of thousands of Australians impacted by the Robodebt scandal.
“Today, they know that their voices have been heard,” Gordon told reporters.”Today is also one more vindication of the principle that Australia remains a nation ruled by laws and not by kings — laws which even hold the government accountable. Long may that be the Australian way.”
Nearly half a million Australians will be impacted by this settlement, Gordon said.
“What it means is that the outcome of the two class actions has been the repayment and compensation to Australia’s most vulnerable citizens of over $2.4 billion arising out of government wrongdoing,” Gordon said.
Felicity Button, a Robodebt victim, said it was a bitter-sweet day.
“I’m thankful and I am so relieved that it came to this point, but at the same time, there is a bitter sweetness to it thinking of the people that have had irreparable damage happen,” Button said at a press conference.
“People that have lost family members. People that have gone through divorce, become bankrupt. Irreparable mental health issues that have stemmed from this, that will never… we can never compensate for that.”