Australia settles robodebt class action for additional A$475 million
Australia's government agreed to pay an additional A$475 million to settle a class action lawsuit by victims of the robodebt automated welfare debt recovery system, which unlawfully pursued over 500,000 people for repayment of benefits they did not owe between 2015 and 2019. The settlement, pending court approval, brings total government payouts to A$587 million and follows evidence that senior officials knowingly continued the unlawful scheme.
What happened
The robodebt system, which operated from 2015 to 2019, used income averaging to automatically cross-reference individual reported income with Australian Tax Office records and issued notices requiring welfare recipients to repay benefits.
The system contained defects that caused it to incorrectly demand repayment from more than 500,000 Australians for debts they did not owe.
The Australian Government initially settled the case in 2020 for A$112 million. After new evidence emerged showing senior public servants knowingly continued operating the unlawful scheme, Gordon Legal pursued an appeal for additional compensation.
Reported impact
Victims reported severe psychological distress. One victim, Felicity Button, stated she had suicidal thoughts when the government deducted A$11,500 from her bank account without warning shortly after she graduated university and became a mother.
Two young men reportedly died by suicide related to the robodebt scheme.
Index analysis
The system was found to be unlawful and its design and execution were described as cruel, with extremely poor handling of consequences.
Governance controls
New evidence disclosed that senior public servants designing and executing the robodebt scheme knowingly proceeded despite knowing it was unlawful.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.