Robodebt Class Action Settlement Approved: $475 Million Payout after Royal Commission Exposed Government Lies

The Federal Court has approved Australia's largest-ever class action settlement, with 125,000 registered Robodebt victims set to share $475 million in compensation. The Royal Commission found the scheme was a "crude and cruel mechanism" that traumatised vulnerable Australians, with some dying by suicide after being wrongly accused of owing money.

The Federal Court of Australia has approved the largest class action settlement in the nation's history. More than 125,000 registered claimants affected by the unlawful Robodebt scheme will share $475 million in compensation.

The Robodebt system was designed to fix overpayment of social security benefits. Instead, it falsely accused hundreds of thousands of vulnerable Australians of owing the government money between 2015 and 2019. Some went without food. Others lost their homes. At least two people died by suicide after being issued with Robodebt notices.

Federal Court Justice Jonathan Beach ruled the additional settlement of $548.5 million including $475 million in compensation, $60 million in administration costs, and $13.5 million in legal costs was "fair and reasonable". The judge thanked victims who had been part of various class actions since 2019, particularly Jenny Miller and Kath Madgwick, who lost their sons to suicide after they were issued with Robodebt notices.

"I did appreciate hearing their perspectives and the fortitude that has been shown particularly from the two mothers whose sons were lost," the judge said. He added the "fiasco" was an opportunity to learn lessons, chastising government officials who were "insulated and detached" from the consequences of their actions.

The settlement comes on top of an earlier $112 million agreement that lawyers successfully appealed after information uncovered in the Royal Commission into the Robodebt Scheme revealed government officials had tried to mislead investigations into the scandal.

Gordon Legal partner Andrew Grech called it a "historic moment" for hundreds of thousands of Australians impacted by the "most shameful chapter in public administration in Australian history".

The Royal Commission described Robodebt as a "crude and cruel mechanism, neither fair nor legal" that made people feel like criminals. 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".

The bungled program has now cost the government more than $2.4 billion following multiple class actions. Attorney-General Michelle Rowland previously acknowledged the settlement, saying, "Settling this claim is the just and fair thing to do".

Compensation payments are expected to begin reaching applicants this year. Fixed payments of $1,000 or $1,750 will be made depending on the category, with class action representatives receiving between $20,000 and $25,000 each for inconvenience over several years. Individual assessments will be completed within 18 months.

As the Robodebt class action settlement is approved, The Silicon Review asks a final question. When a government's algorithm destroys lives and the only consequence is a payout, is that justice or just the cost of doing business badly?

FAQ:

Q: How much is the Robodebt class action settlement?
A: The Robodebt class action settlement is $475 million for 125,000 registered claimants, with an additional $60 million for administration and $13.5 million for legal costs.

Q: How many people were affected by the Robodebt scheme?
A: Approximately 450,000 people were affected by the Robodebt scheme between 2015 and 2019, with more than 125,000 registered for the class action settlement.

Q: How much compensation will Robodebt victims receive?
A: Fixed payments of $1,000 or $1,750 will be paid depending on the category. Individual assessments are also available and will be completed within 18 months.

Q: What did the Royal Commission find about Robodebt?
A: The Royal Commission described Robodebt as a "crude and cruel mechanism, neither fair nor legal" that traumatised people and was a costly failure of public administration.

Q: Why did the Robodebt settlement increase?
A: The settlement increased after the Royal Commission revealed that government officials tried to mislead investigations into the scandal, prompting a successful appeal by law firm Gordon Legal.

Q: Did anyone die as a result of Robodebt?
A: Yes. Jenny Miller and Kath Madgwick lost their sons, Rhys Cauzzo and Jarrad Madgwick, to suicide after they were issued with Robodebt notices.