Robodebt victims to finally get long-awaited settlement payments – here's the good news (and the bad news)
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The government heralded Robodebt as a game-changing instrument in the fight against benefit fraud when it was first introduced in 2015.
This system used data matching algorithms to compare information about a person's annual income from the Australian Tax Office with information about their fortnightly welfare payments from Centrelink.
It was supposed to be a 'flawless' system; however, Robodebt's averaging system proved to be problematic and occasionally inaccurate when calculating actual sums owed by individuals.
When Robodebt was first introduced in 2015, the government said it would be a game-changer in the fight against fraud in the benefits system. Credit: AAP.
Nearly 381,000 people unintentionally contributed $750 million to the system as a result of the automated welfare collection scheme, where they were falsely informed that they owed Centrelink money.
Many Australians have spoken publicly about the financial and emotional toll that being wrongly charged thousands of dollars in sudden debt has taken on their lives as a result of this controversy. Many people were harassed by debt collectors or had their earnings and tax returns withheld to cover their debts.
Some people have even blamed the system for losing a family member, including Jenny Miller from the Gold Coast, whose son Rhys took his own life after being pressed by Centrelink and debt collectors to pay $28,000.
Gordon Legal, a law company based in Melbourne, filed a class action lawsuit challenging the scheme and ultimately reached a settlement that will be paid out to those who are eligible.
In 2019, the Federal Court ruled that Robodebt was unlawful, and the government agreed to repay all of the debts accrued through the program as a result of the class action case.
Services Australia has provided an update more than a year after a landmark court settlement. Credit: Getty.
This month, Services Australia, which is the government body overseeing the settlement, announced that before the end of September, settlement payments for nearly 400,000 victims are expected.
Most people are being warned not to anticipate a windfall, though, as around half of the settlement amounts will only range between $50 and $300.
This link will take you to further information about the class action settlement and whether or not you are eligible to receive a settlement.
This is what the notice on Services Australia's website says: 'We've finished calculating settlement payments for eligible registered group members of the Robodebt class action. This is also known as the Income Compliance class action.'
'Eligible registered group members will get a letter from 5 September 2022 with the amount of their settlement payment. Everyone should receive their payment by 30 September 2022.'
'Most people won't get large amounts of money as a settlement payment. Around half of the settlement payments are between $50 and $300.'
'Some eligible group members who only repaid small amounts may get less than $10 as a settlement payment. People who paid back more, or were without their money for longer, will get larger payments.'
It did say, however, that most of the payments to the victims would be small. Credit: 9News.
The total settlement amount was $112 million, with Gordon Legal receiving $10 million and the rest going to distribution (a total of $101.7 million).
'Eligible registered group members are getting settlement payments from the distribution sum, similar to the interest they could've earned on the debt repayments they made,' Services Australia added.
'Settlement payments were calculated for all eligible registered group members according to the settlement terms and orders made by the Federal Court.'
Refunds, which have reportedly already been paid in the majority of cases, are different from settlement payouts.
It was stated in August by Prime Minister Anthony Albanese that a royal commission would be established to investigate the Robodebt crisis.
'We know that almost 400,000 Australians fell victim to this cruel system. A human tragedy with very real consequences for its victims,' Albanese said.
Catherine Holmes, a former judge who led an investigation into the Queensland floods in 2010 and 2011, was chosen to be the head of the royal commission. By April 2023, she will give the governor-general her final report.
The report will look into the scheme's implementation, the advice that was used, and the outcome of any complaints lodged. The cost to the taxpayer and how it was handled afterwards will also be looked into.
Prime Minister Anthony Albanese said in August that a royal commission would be set up to look into the Robodebt crisis. Credit: AAP.
Members, please don't be afraid to call 13 11 14 to talk to Lifeline if you're ever struggling. You can also call Beyond Blue at 1300 224 636 for more information on depression, or you can make an appointment to discuss a mental health treatment plan with your doctor.
If you or someone you know needs assistance, consider the following helpful resources:
This system used data matching algorithms to compare information about a person's annual income from the Australian Tax Office with information about their fortnightly welfare payments from Centrelink.
It was supposed to be a 'flawless' system; however, Robodebt's averaging system proved to be problematic and occasionally inaccurate when calculating actual sums owed by individuals.
When Robodebt was first introduced in 2015, the government said it would be a game-changer in the fight against fraud in the benefits system. Credit: AAP.
Nearly 381,000 people unintentionally contributed $750 million to the system as a result of the automated welfare collection scheme, where they were falsely informed that they owed Centrelink money.
Many Australians have spoken publicly about the financial and emotional toll that being wrongly charged thousands of dollars in sudden debt has taken on their lives as a result of this controversy. Many people were harassed by debt collectors or had their earnings and tax returns withheld to cover their debts.
Some people have even blamed the system for losing a family member, including Jenny Miller from the Gold Coast, whose son Rhys took his own life after being pressed by Centrelink and debt collectors to pay $28,000.
Gordon Legal, a law company based in Melbourne, filed a class action lawsuit challenging the scheme and ultimately reached a settlement that will be paid out to those who are eligible.
In 2019, the Federal Court ruled that Robodebt was unlawful, and the government agreed to repay all of the debts accrued through the program as a result of the class action case.
Services Australia has provided an update more than a year after a landmark court settlement. Credit: Getty.
This month, Services Australia, which is the government body overseeing the settlement, announced that before the end of September, settlement payments for nearly 400,000 victims are expected.
Most people are being warned not to anticipate a windfall, though, as around half of the settlement amounts will only range between $50 and $300.
This link will take you to further information about the class action settlement and whether or not you are eligible to receive a settlement.
This is what the notice on Services Australia's website says: 'We've finished calculating settlement payments for eligible registered group members of the Robodebt class action. This is also known as the Income Compliance class action.'
'Eligible registered group members will get a letter from 5 September 2022 with the amount of their settlement payment. Everyone should receive their payment by 30 September 2022.'
'Most people won't get large amounts of money as a settlement payment. Around half of the settlement payments are between $50 and $300.'
'Some eligible group members who only repaid small amounts may get less than $10 as a settlement payment. People who paid back more, or were without their money for longer, will get larger payments.'
It did say, however, that most of the payments to the victims would be small. Credit: 9News.
The total settlement amount was $112 million, with Gordon Legal receiving $10 million and the rest going to distribution (a total of $101.7 million).
'Eligible registered group members are getting settlement payments from the distribution sum, similar to the interest they could've earned on the debt repayments they made,' Services Australia added.
'Settlement payments were calculated for all eligible registered group members according to the settlement terms and orders made by the Federal Court.'
Refunds, which have reportedly already been paid in the majority of cases, are different from settlement payouts.
It was stated in August by Prime Minister Anthony Albanese that a royal commission would be established to investigate the Robodebt crisis.
'We know that almost 400,000 Australians fell victim to this cruel system. A human tragedy with very real consequences for its victims,' Albanese said.
Catherine Holmes, a former judge who led an investigation into the Queensland floods in 2010 and 2011, was chosen to be the head of the royal commission. By April 2023, she will give the governor-general her final report.
The report will look into the scheme's implementation, the advice that was used, and the outcome of any complaints lodged. The cost to the taxpayer and how it was handled afterwards will also be looked into.
Prime Minister Anthony Albanese said in August that a royal commission would be set up to look into the Robodebt crisis. Credit: AAP.
Members, please don't be afraid to call 13 11 14 to talk to Lifeline if you're ever struggling. You can also call Beyond Blue at 1300 224 636 for more information on depression, or you can make an appointment to discuss a mental health treatment plan with your doctor.
If you or someone you know needs assistance, consider the following helpful resources:
- Kids Helpline on 1800 551 800
- Suicide Call Back Service on 1300 659 467
- Headspace on 1800 650 890
- ReachOut at au.reachout.com
- MensLine Australia on 1300 789 978
- Care Leavers Australasia Network (CLAN) on 1800 008 774
- Head to Health at headtohealth.gov.au
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