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2w ago

Australia Agrees to Record A$548.5m Robodebt Settlement, Pending Court Approval

The deal follows a royal commission that condemned the unlawful income‑averaging scheme.

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The "robodebt" scheme used income averaging -- comparing a person's reported income with their income as measured by the Australian Tax Office -- to automatically issue notices to welfare recipients saying they would have to repay some benefits
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Overview

  • The Commonwealth will pay an additional A$475 million to class members, with court‑determined caps of up to A$13.5 million for legal costs and up to A$60 million for administration.
  • The agreement resolves the Knox v The Commonwealth appeal launched after new evidence surfaced at the Robodebt royal commission, marking the largest class action settlement in Australian history.
  • Combined with the 2020 compensation and about A$1.76 billion in refunded, cancelled or repaid debts, total financial redress now exceeds A$2.4 billion.
  • Roughly 443,000 to 450,000 people were wrongly pursued under the automated income‑averaging system, which the royal commission called "crude and cruel" and linked to suicides.
  • Federal Court approval and class‑member notification are the next steps, with affected people told only to keep Services Australia contact details current, as accountability investigations continue, including a NACC probe into six officials.