The Robotdebt fallout is set to cost the Federal Government an additional half a billion dollars as it settles a second class action.
Attorney-General Michelle Rowland said the settlement, which was still subject to approval by the Federal Court, would see the Commonwealth pay $475 million as compensation for the harms caused to eligible Group Members in an appeal action brought after the original class action in 2020 over the Robotdebt Scheme.
“The Government has today reached an historic agreement to settle Knox v The Commonwealth, an appeal from the original Robodebt class action settlement in Prygodicz v The Commonwealth,” Attorney-General Rowland said.
“If approved by the Court, this would be the largest class action settlement in Australian history. The size of this settlement reflects the harm caused to vulnerable Australians.”
She said the settlement would be in addition to the more than $1.8 billion in costs following the original Robodebt class action settlement in late 2020, which comprised interest and repayments of wrongfully raised debts.
Attorney-General Rowland said the agreement reached today also allowed the Court to determine separate amounts for the Applicants’ reasonable legal costs (not exceeding $13.5 million) and for the reasonable costs of administering the settlement scheme (not exceeding $60 million).
“Today’s settlement demonstrates the Government’s ongoing commitment to addressing the harms caused to hundreds of thousands of vulnerable Australians by the disastrous Robodebt Scheme.
“The Royal Commission described Robodebt as a ‘crude and cruel mechanism, neither fair nor legal’.
“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.”
