Robodebt scandal: Record-breaking $475 million dollar settlement for victims
Hundreds of thousands of robodebt victims will share in the largest class-action settlement in Australian history after appealing their case against the federal government.
Labor has agreed to pay an additional $475 million in compensation to victims of the debt-collection scheme, which was declared unlawful in 2019.
Including legal fees and administration costs, the settlement is expected to reach nearly $550 million, but the final amount is still subject to court approval.
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By continuing you agree to our Terms and Privacy Policy.“Everyday Australians should now know that they can stand up and demand respect and fairness, especially from their government,” robodebt victim Nathan Knox said after bringing the case forward.
Fellow applicant Felicity Button said people affected by the program had been treated as “second-class citizens”.
“I feel as though myself and all the other victims of robodebt have been heard and finally have our voice back,” she said.
Legal firm Gordon Legal lodged the appeal after the release of the robodebt royal commission’s scathing final report in 2024, which found the automated debt-collection scheme was “crude and cruel” and “neither fair nor legal”.
It recommended a raft of policy changes, corruption investigations and potential civil and criminal prosecutions for some of the officials involved.
In total, about 450,000 people signed on to the class action.
The payout is on top of $1.76 billion in forgiven debts and $112 million in compensation from the original robodebt class action, bringing the total cost to the government to well over $2 billion.
“Without the bravery and persistence of so many victims that came forward to tell their story, and the impact that Robodebt had on their lives, this day would never have come,” Gordon Legal partner Andrew Grech said.
“I am very pleased that our legal challenge has been so successful and that group members can finally begin to put this terrible chapter behind them.”
Attorney-General Michelle Rowland acknowledged the settlement, saying the government was committed to addressing the harms caused by robodebt, a scheme established under the former coalition government.
“Settling this claim is the just and fair thing to do,” she said in a statement.
