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Additional Robodebt class action payout details revealed
Gordon Legal is seeking to get $16 million of the $112 million government payout to victims of Centrelink’s Robodebt program, as more details have been revealed about how the money will be divided among victims.
Tony Zhang
A letter sent to members of the group represented in the class action detailed just who may be paid some of that $112 million, but the settlement still needs to be approved by the court at a hearing in May.
“If the settlement is approved by the Court, $112 million will be made available to be paid to eligible group members, less an amount to be deducted for the Applicants’ reasonable legal costs (as approved by the Court) in bringing the proceeding and to pay Gordon Legal for performing its functions under the Settlement Distribution Scheme,” the letter stated.
Gordon Legal had previously stated it hoped to finish distributing the $720 million of Robodebt repayments by the end of 2021, but the settlement will go through various stages.
The members of the group have been divided into four categories, with only two types of victims to receive part of the $112 million.
If the proposed settlement is approved by the court, victims will not need to repay any “invalid debt”.
People who had a debt raised partly or wholly based on income averaging and paid back some or all of the money to Centrelink will be eligible for the settlement payment.
“The Court will declare debts to be invalid where the rate of the social security payment for the group member was dependent upon the person’s ordinary income on a fortnightly basis,” the letter stated.
“The Commonwealth based its decision on an assumption (Assumption) that the person’s ordinary income for a fortnight (relevant fortnight) was greater than the amount of ordinary income that the person had reported to the Commonwealth for the relevant fortnight.”
Some of those who had a debt that was initially based on income averaging and was then recalculated using payslips or bank statements, and then paid it back in part or in full, will also be eligible for settlement payments.
The letter stated those who had a debt raised against them using income averaging, but had not paid any of it back, will not be eligible for the payment. Those who had a debt raised that wasn’t based on income averaging also won’t be eligible for a settlement payment.
The amount each individual victim gets will be determined based on how much money they had paid to the government and how long they were without the money.
There are more than 400,000 people in the group who repaid a welfare debt in the period, but it is unclear how many of them will be eligible for the extra payment, on top of their refunded debt.
The class action, launched on behalf of people who received notices through the automated debt recovery process, was launched last year with senior partner Peter Gordon making the announcement along with Bill Shorten. It comes after pressure over the federal government’s “15,000 mistakes” borne out of the automated system.
