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Robodebt class action and settlement payments
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The Income Compliance class action settlement was approved by the Federal Court of Australia.
Not all group members will be eligible for a settlement payment. Eligibility for a settlement payment depends on which category your debts are in.
We’ve sent letters to group members about their debt category and eligibility for a settlement payment. The settlement process will take time. We expect payments will be calculated and delivered during the first half of 2022.
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 under the Income Compliance Program since July 2015. It includes people with debts that did not use averaged Australian Taxation Office (ATO) income information. Not every group member will be eligible for a settlement payment.
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 means
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 amount. Most of the refunds referred to in the settlement have been paid to eligible people.
Not every group member will be eligible for a settlement payment.
The settlement payment is in place of interest you could’ve earned on the debt repayments you made. People who paid back more, and were without their money for longer, will get larger payments.
Most people will not get large amounts of money as a settlement payment. The majority of settlement payments will be between $50 and $300.
We’ll calculate settlement payments for all eligible group members, even if they only repaid a small amount of their debt. This means some group members will get less than $50.
Settlement payments are not the same as a refund.
How we notified you if you’re eligible
We sent all group members a letter about their debt category and whether they’ll get a settlement payment. We sent the letter to their myGov Inbox or by post in November 2021.
The letters explained all of the following:
- what category each debt is in
- whether or not they’re eligible for a settlement payment
- the deadline to provide or update their bank details or payment destination
- how to ask for a review if they think their debts are in the wrong category.
Group members had until 10 December 2021 to ask for a review of their debt category.
Group members have menu options in their Centrelink online accounts and a dedicated phone line available. They can go online or call us to record or update their bank details or preferred payment method.
Who’s eligible for a settlement payment
You need to have made repayments on an eligible debt to get a settlement payment.
If your debt was based in full, or in part on averaged ATO income information and you paid back some, or all, of this type of debt, you may be eligible for a settlement payment.
You may also be eligible if all of the following applies to you:
- your debt was based in full or in part on averaged ATO income information
- your debt 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 you didn’t repay any money towards your debt, even if it was based on averaged ATO income information. These debts were changed to zero.
You’re also not eligible if your debt was calculated using averaged ATO income information and both of these apply:
- it was recalculated based on other information you gave us, like payslips or bank statements
- the amount you paid back 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. Those debts need to be repaid if you have not already done so.
If you’re eligible and don’t currently get a Centrelink payment, you may need to register your bank account, or tell us how you want to be paid.
Your letter will tell you if you need to register, you must do this by 11 February 2022 or we cannot pay your settlement. To register do both of these steps:
- sign into myGov and go to Centrelink
- complete the Class action settlement pending task.
If you currently get a Centrelink payment we’ll pay your settlement payment to the same account. You don’t need to update your payment details unless you choose to.
If you gave us your bank details as part of the refund process, we’ll use the same account we paid your refund into.
You have until 14 March 2022 to change where your payment goes, if you want to.
To check or update your bank account or payment destination do all of the following:
- sign into myGov and go to Centrelink
- go to Payments and claims in the menu, and then Income Compliance
- go to Class action settlement.
Follow the prompts and submit your changes.
What the next steps are
Once we’ve completed the review process, we can work out how much to pay each eligible group member. We’ll write to you again when this step is complete.
We’ll do this during the first half of 2022.
You can read more about how we plan to distribute settlement payments.