Court Approves $1.7 Billion Settlement For ‘Shameful’ Robo-Debt Scheme

Court Approves $1.7 Billion Settlement For ‘Shameful’ Robo-Debt Scheme
Image: AAP/Julian Smith

The Federal Court has approved a $1.7 billion settlement for the 430,000 welfare recipients who were charged under Robo-Debt scheme.

This amount was first proposed back in November, pending Federal Court approval. According to Gordon Legal, the $1.7 billion will include $112 million in compensation.

It will also include refunding $751 million in repayments of invalid ‘debts’, dropping claims for $744 million in repayments that had been partially paid and dropping $268 in ‘debts’ that had not been paid.

The Federal Court also approved $8.4 million in costs to Gordon Legal.

Around 70o participants in the class action had objections to the settlement. They are permitted to reject the settlement and bring their own cases if they so choose.

As part of the settlement the government will not accept legal responsibility for Robo-Debt.

“In settling the class action, the Commonwealth has not admitted that it was legally liable to Group Members,” Gordon Legal said back in November.

Justice Bernard Michael Murphy said the proceedings “exposed a shameful chapter in the administration of the Commonwealth social security system and a massive failure in public administration”.

“One thing, however, that stands out from the objections is the financial hardship, anxiety and distress, including suicidal ideation, and in some cases suicide, that people… say was suffered as a result of the Robo-Debt system,” he said.

However, Justice Murphy also said that he doesn’t necessarily believe that the government knew its actions were unlawful.

“Given the choice between a stuff-up and a conspiracy, one should usually go with a stuff-up.”

What happened with Robo-Debt?

These “stuff ups” saw hundreds of thousands of Australians landed with so-called debts since the Robo-Debt (officially called the Income Compliance Program) was first introduced in 2016.

The aim of the program was to compare Centrelink earnings reports with ATO income reports to unearth discrepancies that people would then need to explain.

The accuracy of the scheme came into question due to the increasing number of alleged debts that were raised with no evidence attached, but it continued to be used until 2019 when the Federal Court ruled against the continued use of Robo-Debt.

During that period more than 2,000 Australians died after receiving a Robo-Debt notice.

“Nothing less than a royal commission will appease the hundreds of thousands of Australians who were shamed and stigmatised by the Robodebt scandal. This is a shameful chapter in Australian history,” Shadow Minister for Government Services, Bill Shorten, said on Twitter.

He has also previously asked what consequences there will be for ministers Alan Tudge and Stuart Robert for their roles in the Robo-Debt scandal.

It’s unclear exactly how much compensation each of the 430,000 impacted Australians will get. But it is worth considering that $112 million divided by 430,000 is just $260.