Information about the Income Compliance class action settlement

17 November 2020

There is an update on the Income Compliance Program class action. These changes may affect you if you’re a member.

The Commonwealth and Gordon Legal have agreed to settle the Income Compliance class action. This means the matter will no longer go to trial, if the court approves the settlement.

Under the settlement, the Commonwealth will pay $112 million (in the nature of interest) for eligible group members who have received a refund.

The court will also assess and award any reasonable costs to Gordon Legal from this amount.

The amount people will get depends on when they paid money towards their debts, and when they were refunded.

People will be eligible for a settlement payment if they have paid money towards a debt that was based in full, or part, on averaged ATO information.

This will include a small number of people who:

  • had a debt raised in full or in part on averaged ATO information
  • had the debt recalculated, using payslips or bank statements, to a lower amount
  • had repaid more than the recalculated amount.

Not every group member will be eligible for a payment under the settlement.

Group members whose debts were based on averaged ATO income but did not repay any money, have already had their debts zeroed. We have also written to them to let them know.

Group members whose debt was raised using information other than averaged ATO income, will not be eligible for a settlement payment.

Eligible group members will get their payment in 2021.

We are working together with Gordon Legal to finalise further details of this settlement before asking the court to approve them.

We’ll let members know what this means for them and the next steps once this has occurred.

If you’re a member of the class action, you don’t need to do anything at this stage.

There is no need to call us or Gordon Legal.

Refunds referred to in the settlement

We have already paid most of the refunds referred to in the settlement to eligible people.

As at 13 November, $705.9 million had been refunded to just over 405,000 customers.

If you need more information, read more about refunds for the income compliance program.

What the class action is

Gordon Legal filed a class action lawsuit against the Commonwealth of Australia. They did this on behalf of 6 applicants and other group members. The class action relates to Centrelink debts raised by income compliance reviews since July 2015.

As part of this class action, the Federal Court required us to send notices to members of the class. We contacted people who are members of the class. We did this even if their debts had not used averaged ATO income.

Next steps

For more information please see our Income Compliance class action settlement media statement.

Page last updated: 20 November 2020