Over 450,000 victims of the Australian federal government's unlawful Robodebt debt collection scheme will receive a total of $475 million in compensation.
The program, which ran between 2015 and 2019, wrongly accused hundreds of thousands of people of owing money to the government, causing widespread hardship.
Key Details
- The Robodebt system was intended to recover overpaid social security benefits but resulted in incorrect debt notices being issued.
- Some vulnerable individuals faced severe financial hardship, food insecurity, and in some cases, suicide.
- The total cost to the government from the bungled program exceeds $2.4 billion, including prior class action settlements.
- Federal Court Justice Jonathan Beach approved an additional settlement of $548.5 million. This includes the $475 million compensation, up to $13.5 million in legal costs, and payments of $20,000–$25,000 to class action representatives for inconvenience.
- This settlement adds to an earlier $112 million agreement that was successfully appealed.
Statements
Justice Beach thanked victims involved in class actions since 2019, particularly Jenny Miller and Kath Madgwick, whose sons died by suicide after receiving robodebt notices. He described the program as a "fiasco" and criticized government officials for being "insulated and detached" from the consequences.
Background
A settlement was first reached in 2021 but did not account for information later uncovered by the Royal Commission into the Robodebt Scheme, including attempts by officials to mislead investigations. The class action was led by Gordon Legal on behalf of Katherine Prygodicz, who was twice pursued for a debt over $14,000.