Robodebt Class Action

Federal Court has approved Robodebt settlement

Robodebt Class Action Settlement


In June 2021 the Honourable Justice Murphy of the Federal Court of Australia approved the settlement in the Robodebt Class Action.

A settlement was reached between the Representative Applicants and the Commonwealth on 16 November 2021 and that settlement has now been approved by the Federal Court.

Distribution of the settlement sum

Now that the settlement has been approved a settlement distribution scheme will come into effect.

Under the settlement distribution scheme most, but not all, Group Members will receive a settlement payment from the total settlement sum of $112 million, minus legal costs.

This share of a settlement payment will be received by those Group Members who also received or are eligible to receive a refund of their Robodebt as part of the announcement made by the Commonwealth in May 2020, after the commencement of the Robodebt Class Action.

Whether a Group Member receives a settlement payment depends on their individual circumstances and the category that they fall in under the settlement distribution scheme.

As part of the settlement distribution scheme, a review all of the debts issued to Group Members will be undertaken to ensure their entitlements under the settlement are correctly assessed.

In August 2021 the Commonwealth will start notifying all Group Members of how they have been categorised and whether they are eligible for a settlement payment.

The majority of settlement payments will be made by May 2022.

In approving the settlement, the Honourable Justice Murphy decided that the approximately 600 Group Members who lodged an objection to the settlement will be given the opportunity to “opt out” of the settlement if they do not wish to be part of it. Those Group Members will receive a letter from Centrelink within 8 weeks of the settlement approval explaining how they can opt out if they wish to do so.

Assistance and advice regarding the settlement distribution scheme

We understand that you might have questions about how the settlement will affect you. We recommend that you wait to receive your categorisation letter from Centrelink, which Centrelink will begin sending to all Group Members from August 2021. The categorisation letter will tell you whether or not you will receive a payment.

If you need assistance in relation to the settlement, we recommend you call Centrelink’s compliance helpdesk first on 1800 171 846.

If you have further questions after speaking to Centrelink, you may contact Gordon Legal on 1300 001 356.

You can also find more information on our website at the general FAQ page and the settlement FAQ page.

Key points of Robodebt Class Action

The Representative Applicants commenced the Robodebt Class Action on 19 November 2019. On 16 November 2020, the scheduled first day of trial, the Representative Applicants and the Commonwealth agreed a settlement.

Since the commencement of the class action, more than $1.7 billion in financial benefit will have been provided to approximately 430,000 group members.

The benefits to Group Members include the following elements:

  • The Commonwealth will pay $112 million in compensation to approximately 400,000 eligible individual Group Members, including legal costs;
  • The Commonwealth is repaying more than $751 million in debts collected from Group Members invalidly and will continue to provide refunds;
  • The Commonwealth has agreed to drop claims for repayment of approximately $744 million in invalid debts that had been partly paid back, as well as dropping claims for $268 million in invalid debts where no repayments had been made.

Gordon Legal is proud to have achieved this historic result which resolves the claims of hundreds of thousands of people who were issued with Centrelink debts calculated wholly or partly on the basis of averages derived from ATO income data.

Court documents

Copies of the court documents are available below:

Opt Out Notice, Amended Originating Application, Second Further Amended Statement of Claim,  Amended Reply, Court Orders (6 March), Court Orders (5 May), Court Orders (19 June)Court Orders (27 July 2020), Court Orders (17 August 2020), Court Orders (7 September 2020), Court Orders (17 September 2020), Court Orders (21 September 2020),  Court Orders (14 October 2020), Second Further Amended Defence, Court Orders (23 December 2020), Deed of Settlement, Settlement Approval Court Orders (11 June 2021), Settlement Approval Judgment, Settlement Approval Judgment Summary


What is a Class Action?

A Class or Group Action is a Court procedure which allows people with similar claims against another party to bring their action in one Court Proceeding rather than requiring them to go to the cost (and take the individual risk) of commencing their own claim.

In Australia, the law provides individual Group or Class members the opportunity to Opt Out of the Proceedings if they do not wish to participate or wish to bring their own individual claim.

The benefit of Class or Group Actions is that it means that claims that would otherwise not be economically viable for a person to bring on their own behalf are able to be gathered together so that the costs and risks can be shared among a larger group of people with similar claims.

What are the risks of participating in a Class Action?

The risks of participating in a Class Action are similar to the risks that any person bringing an individual claim would face, except that the risk of having to pay the other party's legal costs if the claim is unsuccessful only falls on the Representative Plaintiff or Applicant.

It is important to understand that you do not face the individual risk of an adverse costs order unless you agree to become the Representative Plaintiff or Applicant. If that was the case then your lawyer will discuss those risks with you very carefully before you agreed to act as the Representative Plaintiff or Applicant.