Class action settlement

Information for people who are part of the Income Compliance class action. You may also know this as the robodebt class action settlement.

The Federal Court of Australia has approved the Income Compliance class action settlement.

If you are part of the class action, you don’t need to do anything right now.

Group members who objected to the proposed settlement will be given a second opportunity to opt out of the class action.

We’ll write to all objecting group members in the next two months to give them more information on how they can opt out.

The settlement process will take time. This means we can’t pay people straight away.

We’ll contact all class action group members over the coming months with more information.

What the Income Compliance class action is

In November 2019, Gordon Legal filed a class action lawsuit on behalf of 6 applicants and other group members against the Commonwealth of Australia. You may also know this as the robodebt class action. The class action relates to Centrelink debts raised by income compliance reviews since July 2015. This included people with debts that did not use averaged ATO income information.

In November 2020, the Commonwealth and Gordon Legal agreed on a proposed settlement. The Federal Court approved the settlement on 11 June 2021.

What the settlement approval means

The approved settlement means the matter won’t go to trial.

Eligible group members will get settlement payments from the agreed $112 million settlement sum.

Gordon Legal’s court-approved costs will be deducted from this.

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

The amount each person gets will be different.

The settlement payment is in place of interest you could’ve earned on the debt repayments you made. People who paid us back more, and were without their money for longer, will get larger payments.

Settlement payments are not the same as a refund. Most of the refunds referred to in the settlement have already been paid to eligible people.

What you need to do

If you’re a class action group member, you do not need to do anything right now.

If you objected to the proposed settlement, we’ll contact you in the next two months with more information on how you can opt out of the settlement, if you want to.

If you’re unsure whether you’re part of the class action, contact Gordon Legal.

Who’s eligible for a settlement payment

Some people whose debts were based in full, or in part, on averaged Australian Taxation Office (ATO) income information are eligible. If you paid some, or all, of this type of debt, you’ll get a settlement payment.

You’ll also be eligible if all of the below applies to you:

  • your debt was based in full or in part on averaged ATO income information
  • it was recalculated based on information you gave us, like payslips
  • you paid back more than the recalculated amount.

Who’s not eligible for a settlement payment

You’re not eligible if your debt was fully or partially based on averaged ATO income information, but you didn’t repay any of it.

You’re also not eligible if your debt was calculated using ATO information and both of these apply:

  • it was recalculated based on other information you gave us, like payslips or bank statements
  • the amount you’d paid was less than or equal to the recalculated debt.

If your debt wasn’t based on averaged ATO income, you aren’t eligible for a settlement payment.

What the next steps are

We’re aiming to deliver payments as quickly as possible, but the settlement process will take time.

We have to complete a number of steps before we can start making payments.

This includes giving group members who objected to the settlement another chance to opt out.

We will also work out who is eligible for a settlement payment.

Once complete, we’ll write to all group members to let them know if they’re eligible for a settlement payment.

We’ll then work out how much to pay each eligible group member.

We’ll let eligible group members know how much they’ll get and start making payments in early 2022.

You can read more about how we plan to distribute settlement payments.

Page last updated: 11 June 2021