Australia to pay record $309m to victims of illegal debt recovery scheme
The Australian government has agreed to pay A$475 million ($309 million) in compensation to victims of the illegal “Robodebt” welfare debt recovery program — a payout that, if approved by the courts, would be the largest class action settlement in the country’s history.
The Robodebt scheme (2016–2019) used a faulty automated algorithm to wrongly accuse hundreds of thousands of welfare recipients of owing debts. A court later ruled the system unlawful, and a royal commission found it pushed vulnerable people into financial hardship, with at least three suicides linked to the scandal, News.Az reports, citing Reuters.
The latest deal brings total repayments and compensation linked to Robodebt to A$2.4 billion, ending what has been described as one of Australia’s worst public administration failures.
Attorney-General Michelle Rowland said settling was “the just and fair thing to do.” Law firm Gordon Legal, which brought the class action, welcomed the outcome. Senior partner Peter Gordon called it “a day of vindication and validation” for victims.
One of the lead plaintiffs, Felicity Button, noted the bittersweet nature of the settlement, saying many suffered irreparable harm.
Robodebt originally recovered A$1.76 billion in false debts with minimal human oversight. The commission later condemned it as a “crude and cruel mechanism, neither fair nor legal.”
If approved, the settlement — which could rise to A$548 million with legal and administrative costs — will mark the largest class action payout in Australian history.
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