The Commonwealth will pay a further $475 million to the victims of Robodebt. Photo: Michelle Kroll.
The Federal Government has reached a historic agreement that will see the Commonwealth pay $475 million in further compensation to the victims of the illegal Robodebt scheme.
The agreement settles the Knox v The Commonwealth appeal from the original Robodebt class action settlement in Prygodicz v The Commonwealth.
The settlement of the appeal is still subject to approval by the Federal Court, but if approved, it will be the largest class action settlement in Australian history.
Attorney-General Michelle Rowland said the size of the settlement reflects the harm caused to vulnerable Australians by Robodebt, the “heartless and disastrous policies” of the former Liberal government.
“The Royal Commission described Robodebt as a ‘crude and cruel mechanism, neither fair nor legal’,” she said.
“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.”
The settlement will be in addition to the compensation paid following the original Robodebt class action settlement in late 2020, which comprised interest and repayments of wrongfully raised debts.
The agreement also allows the Federal Court to determine separate amounts for the appeal applicants’ reasonable legal costs (not exceeding $13.5 million) and for the reasonable costs of administering the settlement scheme (not exceeding $60 million).
Eligible group members of the appeal do not need to take any action at this stage, other than ensuring their contact details are up to date with Services Australia.
The government will provide further information once the next steps are put in place by the Federal Court.
Speaking in the Senate on the development, Government Services Minister Katy Gallagher was scathing of the Coalition’s pursuit of Robodebt’s unwitting victims.
“To ‘hunt down’ – I think that was the language used by [Coalition] ministers – to ‘hunt down’ people that owed money and have them pay it back to the Australian Government,” Senator Gallagher said.
“Of course, the major problem with that was for the 450,000 that were affected by Robodebt, the majority of them didn’t owe any money.
“Their government had raised debts they never owed and they pursued them and used language like ‘we will hunt you down and jail you’ for debts that they never owed.
“And not only were they pursuing debts that people didn’t owe and demonising some of the poorest and most vulnerable Australians … they were also using Robodebt as a budget savings measure…
“And we see the end result of this.
“Not only the people that lost lives, the families traumatised, the individuals who will never, ever get over the biggest failure of public administration in this country that those opposite are presided over, but we now know the ongoing harm that has happened to those people affected by Robodebt, and we have sought to settle this legal matter.
“The decision taken demonstrates our commitment to address the harms caused by Robodebt.”
The Australian Council of Social Service has welcomed the announcement, but says more actions are needed to deliver full justice for the impacts of the scheme.
ACOSS CEO Cassandra Goldie said Robodebt adversely affected far too many people, who are still waiting for someone to be held accountable.
“Ten years on from when Robodebt commenced, no one responsible for its design, implementation and continuation has been publicly held accountable in a way that delivers justice for its victims and their families,” Dr Goldie said.
“This is truly astounding. There is clear public value in ensuring that justice is carried out for those responsible for Robodebt.
“It is shameful that those who are responsible for Robodebt and who ignored its harm have been subject to very little accountability, if any.
“Robodebt victims and their families deserve so much better.”
Greens Senator Penny Allman-Payne also welcomed the news while saying there is more work to do.
“It would be much cheaper and easier for the government, and much less cruel for people on income support, if the government would stop perpetuating systems that are unlawful,” Senator Allman-Payne said.
The Targeted Compliance Framework, which monitors mutual obligations over JobSeeker payments, remains in operation.
The Commonwealth Ombudsman recently reported that 964 jobseekers were unlawfully punished through that system.
“We know that people have lost lives during the Robodebt scandal, we know that people’s lives have spiralled out of control when they’ve got unlawful debts,” Senator Allman-Payne said.
“It’s pretty unconscionable that the government is continuing the Targeted Compliance Framework, which really has the potential to cause more harm and more damage again.”
