[SYDNEY] The Australian government said on Thursday (Sep 4) it had agreed to pay a further A$475 million (S$399.4 million) in compensation to victims of an illegal welfare debt-recovery programme, which, if approved by the courts, would be the largest class-action payout in the country’s history.
The programme, known as “Robodebt”, chased hundreds of thousands of welfare recipients for false debts calculated by a faulty automated algorithm between 2016 and 2019, until a court ruled it illegal.
A government royal commission inquiry found that Robodebt pushed vulnerable people into further debt and caused multiple suicides.
The latest settlement brings total government repayment and compensation costs to A$2.4 billion, and ends what is regarded as one of Australia’s worst-ever public administration scandals.
Robodebt victims and law firm Gordon Legal originally brought the class-action suit in 2019. The government settled the case in 2020, agreeing to pay more than A$720 million in unlawfully claimed debts, A$400 million in unlawful demands and A$112 million in compensation to 400,000 people.
Plaintiffs appealed the case after new evidence was uncovered during the government inquiry.
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“Settling this claim is the just and fair thing to do,” Attorney-General Michelle Rowland said in a statement on Thursday.
The statement said that if the compensation is approved by the courts, it would be the largest class-action settlement in Australian history.
Peter Gordon, senior partner and founder of Gordon Legal, welcomed the settlement, which could rise to A$548 million with legal and administration costs.
“Today is a day of vindication and validation for hundreds of thousands of Australians afflicted by the Robodebt scandal,” he told reporters.
Felicity Button, a Robodebt victim and one of the lead applicants, said there was a “bittersweetness to it, thinking of the people that have had irreparable damage happen” as a result of the scheme.
The Robodebt programme was designed to ensure welfare recipients were not under-reporting income and over-receiving government payments.
But computer algorithms for the scheme wrongly calculated that hundreds of thousands of Australians owed money and, with little to no human oversight, recovered A$1.76 billion.
Robodebt was a failure of public administration, a “crude and cruel mechanism, neither fair nor legal”, that made many people feel like criminals, and caused at least three known suicides, the government inquiry found. REUTERS
