The Federal Government has agreed to a $1.2 billion payout to nearly half a million Australians affected by the controversial Robodebt scheme, expected to be the largest class action payment in the country's history once approved by the Federal Court.
The trial was expected to begin on Monday morning but after it was delayed for hours, Gordon Legal, who was representing the approximately 400,000 class action members, announced it had reached a more than $1.2 billion settlement with the government.
The payout to members of the class action was agreed on the basis the government did not admit it was legally liable.
Gordon Legal have secured a landmark settlement of the Robodebt Class Action. If approved by the Federal Court, more than $1.2 billion in financial benefit will have been provided to approx. 400,000 group members since the commencement of the class action. https://t.co/hygBuSJt2h
— Gordon Legal (@gordonlegal_au) November 16, 2020
Of the $1.2 billion total, $721 million had already been agreed to be paid back in May 2020. A further $398 million of invalid debts under the scheme would be erased with $112 million being provided in compensation for those affected.
Shadow government services minister Bill Shorten said it was a long-time coming but that a Royal Commission into the scheme was now needed.
"It should never have taken four years," Mr Shorten said on Monday afternoon.
"I ... congratulate all of the advocates, all of the welfare activists, the Victorian Legal Aid authority, who over the last four years, have been trying to get fairness and the law applied to some of our most vulnerable fellow Australians.
"Now it is time for the Morrison Government to fess up. Call me a bit sceptical, but the only reason why the Morrison Government surrendered is they had the hot breath of the court on their throat."
Services Australia has been approached for comment.
More to come.
