Gov offers another $475m compensation for Robodebt victims

The federal government has agreed to pay victims of the Robodebt scandal a further $475 million in compensation following an appeal against 2020’s landmark $1.8 billion settlement.

The agreement will also allow the Federal Court to determine payments for applicants' “reasonable” legal costs – up to $13.5 million, alongside administrative costs of up to $60 million.

In a statement, the Attorney-General's Department said the proposed settlement “would be the largest class action settlement in Australian history” if approved by the Court.

“The Royal Commission described Robodebt as a ‘crude and cruel mechanism, neither fair nor legal’,” Attorney-General Michelle Rowland said in a statement.

“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’.

“Settling this claim is the just and fair thing to do.”

Robodebt was a highly criticised program of automating Centrelink debt recovery between 2015 and 2019.

In 2020, the Liberal government settled a class action of $1.8 billion in refunds, wiping victims’ debts and issuing refunds, which was approved a year later. 

A Royal Commission was held in 2022–2023, which found the scheme was illegal, harmful, and knowingly persisted with by public officials and ministers.

In its findings, the Commission described public servants as engaging “in behaviour designed to mislead and impede the Ombudsman” [pdf] during investigations into Robodebt.

A year after the report’s publication, law firm Gordon Legal appealed the settlement on the basis of “damning new evidence” and claims senior public servants who administered the scheme engaged in “misfeasance in public office”, the Guardian reported at the time.