The Federal Government today moved to settle an enormous class action lawsuit over the unfair and unlawful Centrelink Robodebt system, with legal representatives saying the government is now on the hook for $1.2 billion in returned debts and compensation.
ABC reports the case was scheduled to go before the Federal Court today, but was settled before any of that could happen. Now, it’s up to the terms of the settlement to be rubber-stamped by a judge.
Gordon Legal, which acted on the behalf of five key applicants and 400,000 group members, said today’s settlement will see eligible folks receive a share of $112 million in compensation. A further $398 million of invalid debts will also be dropped.
Those figures come on top of the $721 million the Federal Government has already vowed to refund after the Robodebt scheme was first found to be unlawful.
Robodebts were Centrelink ‘debts’ cooked up by an automated government system.
That process ‘worked out’ the income of Centrelink applicants by averaging their Australian Tax Office data. Those averages were then compared to Centrelink applicants’ self-reported incomes.
But the system often reported folks were earning more than what they independently reported, making them ‘ineligible’ for certain payments. People in that category were sent Robodebt notices.
The system’s key failure was that when the averaged figures did not match applicants’ actual incomes, needless debt notices were issued to innocent punters.
Automated income averaging has long come under fire from community activists and mental health advocates, who say false debt notices contributed to severe distress among the community.
Shadow Minister for Government Services Bill Shorten today said government ministers “must be accountable for this epic scandal”, adding that the settlement was a positive development for those “illegally hounded by the Government.”
Hope the end is in sight for hundreds of thousands of #Robodebt victims illegally hounded by their Government.
— Bill Shorten (@billshortenmp) November 16, 2020
Notably, Gordon Legal notes the settlement doesn’t mean the Federal Government has accepted legal liability to members of the lawsuit.