The Australian Government will be paying out $112 million to 400,000 welfare recipients who were charged under Robodebt scheme, pending approval of the Federal Court.
The government has settled on Robodebt but won’t take responsibility
The settlement comes off the back of a $1.2 billion class action lawsuit against the government, which was scheduled to begin on Monday.
The announcement was made by Gordon Legal on Monday afternoon.
“The settlement reached with the Commonwealth of Australia means that if approved by the Court, since the commencement of the Robodebt Class Action, more than $1.2 billion in financial benefit will have been provided to approximately 400,000 group members,” the company said in a statement.
The compensation will be in addition to the $720 million in refunds that were collected unlawfully from welfare recipients via the Robodebt scheme. These refunds were first announced by trhe government back in May, 2020.
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According to Gordon Legal, the government has also agreed to drop claims of $398 million it “invalidly asserted against group members of the class action.”
But despite the settlement, the government is still refusing to take legal responsibility for Robodebt.
“In settling the class action, the Commonwealth has not admitted that it was legally liable to Group Members,” Gordon Legal said.
It’s currently unclear how the compensation will be divided. But at face value, $112 million divided by 400,000 people is only $280.
Gordon Legal have secured a landmark settlement of the Robodebt Class Action. If approved by the Federal Court, more than $1.2 billion in financial benefit will have been provided to approx. 400,000 group members since the commencement of the class action. https://t.co/hygBuSJt2h
— Gordon Legal (@gordonlegal_au) November 16, 2020
Four years in the making
Robodebt, or the Income Compliance Program, was first introduced by the Australian government in 2016. Its aim was to compare Centrelink earnings reports with ATO income reports to unearth discrepancies that people would have to then explain.
However, its accuracy came under considerable scrutiny due to there being no evidence for an exponential number of the so-called debts that were raised. Back in 2019 the Federal Court ruled against the continued use of the defective Robodebt algorithm.
Shadow Minister for Government Services, Bill Shorten, has called for a Royal Commission into Robodebt. He has also demanded what consequences there will be for ministers Alan Tudge and Stuart Robert for their roles.
Bill Shorten, Labor’s shadow government services minister, says the robodebt settlement is “both the most costly and involves the most people of any settlement by an Australian Government.” pic.twitter.com/JumTc21AiV
— Josh Butler (@JoshButler) November 16, 2020
It’s worth noting that it took a long time to get to this point. Shorten may have been vocal about Robodebt in the recent past, but it took years of work from grassroots campaigns from the likes of Asher Wolf and #NotMyDebt to get the Opposition here. During that period over 2,000 Australians took their own lives due to Robodebt.