More than 125,000 Aussies who were impacted by the government’s unlawful Robodebt scheme will be entitled to a share of $475 million in compensation. The Federal Court of Australia has this week approved the class action settlement, which is the biggest in Australia’s history.
Federal Court Justice Jonathan Beach ruled that an additional settlement of $548.5 million, which includes the $475 million compensation, $60 million in costs to administer the scheme and $13.5 million in legal costs, was fair and reasonable. The settlement comes on top of an earlier $112 million agreement lawyers successfully appealed.
Gordon Legal partner Andrew Grech said it was a “historic moment” for hundreds of thousands of Aussies who were impacted by the “most shameful chapter in public administration in Australian history”.
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“Their resilience and persistence have been fundamental in achieving this remarkable outcome,” Grech said.
“The team at Gordon Legal is proud to have attained approval on the largest class action settlement in Australian legal history.
“Now that the settlement scheme has been approved, the compensation assessment and distribution process will commence, with money expected to begin reaching applicants as early as this year.”
How much compensation will Robodebt victims receive?
Compensation will start being paid to those who opt for a fixed payment later this year.
Gordon Legal confirmed to Yahoo Finance fixed payments were proposed to be $1,000 or $1,750, depending on the group member’s category.
Participants can also choose to have their claims individually assessed to take into account their personal circumstances. The process of assessment of individual claims will start next month.
Fixed payments are expected to land within six months, while individual assessments are expected to be within 18 months.
Class action representatives will be paid between $20,000 and $25,000 each for “inconvenience occurred over a number of years”.
More than 125,000 group members registered to participate in the settlement scheme.
‘Monumental moment’ for Robodebt victims
Former nursing student Felicity Button was part of the class action and incurred debt worth $11,500 when claiming Youth Allowance.
“The Federal Court’s approval of the Robodebt Class Action is a monumental moment for myself and all the other victims of the Scheme,” she said.
“For years, we were treated as though our experiences were insignificant and not worthy of compensation.”
Felicity Button was a victim of Robodebt and an applicant in the class action brought by Gordon Legal. · Source: AAP
Robodebt was an automated government scheme that ran under the Coalition government from 2015 to 2019. It used a faulty algorithm to incorrectly demand that tens of thousands of welfare recipients pay debts they did not owe.
The scandal caused widespread distress, pushing vulnerable Aussies into debt. It resulted in the suicide of at least two Australians.
A Royal Commission in 2023 labelled Robodebt a “crude and cruel mechanism” that was “neither fair nor legal”. It found evidence that senior public servants who designed and administered the scheme were aware that it was unlawful from the beginning.
In September 2024, Gordon Legal appealed the previous settlement, seeking further compensation for victims following the damning revelations in the Royal Commission’s report.
Last year, the federal government agreed to settle the claim with Attorney-General Michelle Rowland calling it the “just and fair thing to do”. The settlement had been subject to approval by the Federal Court.
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