Latest updates for Income Compliance Program class action members

23 December 2020

The court has scheduled a hearing on 6 and 7 May 2021 to approve the final settlement terms.

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.

The approval hearing is scheduled for 6 and 7 May 2021. There won’t be an approved settlement outcome before this date.

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

We’ll write to all members in late January 2021 to provide more details about the settlement. We’ll explain how members can object to the settlement and when they need to do this by.

There is no need to call us or Gordon Legal.

What the settlement means

Under the settlement, the Commonwealth will pay $112 million, in interest, to eligible group members who 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.

Refunds referred to in the settlement

Most of the refunds referred to in the settlement have already been paid to eligible people.

$705.9 million has been refunded to over 405,000 people as at 13 November 2020.

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. If you need more information you can read more about class action notices.

What the next steps are

If you’re a member of the class action, you don’t need to do anything right now. We’ll write to you in late January 2021 with more details about settlement. We’ll explain how you can object to the settlement, and when you need to do this by.

If you wish to object, you have until 5 March 2021 to lodge your objection. You must submit any documents to support your objection by 19 March 2021.

If you don’t want to object to the settlement, there’s nothing you need to do.

Page last updated: 24 December 2020