Warning: This story contains references to self-harm

The federal government on Thursday agreed to pay a further $475 million to victims of the Robodebt scandal, after deciding not to defend an appeal brought by class action firm Gordon Legal.

The settlement, which now awaits approval by the federal court, will be in addition to the $112 compensation payout agreed to in 2020 — taking total compensation to $587 million.

The court can also now determine additional amounts for legal costs up to $13.5 million and administration costs up to $60 million.

Across the two class actions, a possible total of more than $2.4 billion had been won or refunded to victims, class action lawyers said.

Robodebt was an automated debt recovery program created by former Liberal-National coalition governments and fully implemented in 2016, which wrongfully accused some welfare recipients of owing the government money.

The system incorrectly claimed almost $2 billion from around 450,000 people using income averaging techniques and data from Centrelink and the Australian Taxation Office, which a Royal Commission found to be illegal.

Attorney-General Michelle Rowland said settling the second class action appeal was “the just and fair thing to do”.

“Today’s settlement demonstrates the Albanese Labor government’s ongoing commitment to addressing the harms caused to hundreds of thousands of vulnerable Australians by the former Liberal government’s disastrous Robodebt scheme,” she said.

The government said members of the class action should make sure their contact details are correct with Services Australia, ahead of information about further payments being provided after the federal court’s decision.

'A day of warning to governments and bureaucrats’

Gordon Legal representatives welcomed the government’s decision, telling media the development was “a day of vindication and validation for hundreds of thousands of Australians”.

Founder and senior partner Peter Gordon said it was also "a day of warning to governments and bureaucrats at all levels, not to recklessly and unlawfully attack the people who elected them, or who they were hired to protect”.

Gordon said the most damning evidence was only made available to lawyers through the final report of the Robodebt Royal Commission in July 2023, almost two years after first class action settlement.


Gordon Legal founder Peter Gordon says the firm issued fresh legal proceedings after new evidence was unearthed by the Robodebt Royal Commission. Image: ABC News / YouTube

"More than 450,000 Australians have or will benefit from this settlement," he said.

"It is, of course, far and away the largest class action settlement in Australia's history.

“… While it is satisfying for lawyers to achieve a total result of $2.4 billion, it is frankly infuriating to know that our own commonwealth government caused so much suffering to its own people — and it arose out of willful misconduct.”

Government decision ‘bittersweet’, victim says

Class action member and Robodebt victim Felicity Button told Thursday’s press conference that the government's decision was “bittersweet” given "irreparable” damage to some victims and their families.

“People that have lost family members, people that have gone through divorce, gone bankrupt, irreparable mental health issues that have stemmed from this — we can never compensate for that," she said.

“But this is as just and as fair as it could have been, and ever would be.”

The Robodebt Royal Commission linked at least two deaths by suicide to the scheme.

"For some, there are wounds that will never heal and we can never do justice to those people, and the system can't," Gordon said.

"But what we do hope and feel is that people today feel that their voices have been heard."

Australia’s national corruption watchdog announced in February that it would investigate six individuals for their involvement in the Robodebt scandal.

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