Australian government agrees to its largest class action settlement for victims of illegal debt collection scheme

The compensation to victims of the Robodebt scheme represents the largest class action resolution in Australian legal history, the Canberra Times reported.

Michelle Rowland, Australia's attorney-general, said the government has agreed to pay the record-breaking class action settlement in compensation for harm caused to victims of the "illegal and immoral" Robodebt scheme.

The settlement, however, is pending approval by a federal court.

The automated scheme, launched in 2015, used data matching algorithms to recover welfare debts from people the government claimed had cheated the system.

In 2023, a royal commission found that the government had wrongfully raised 1.7 billion AUD ($1.11 billion) in debts against 433,000 people under the scheme.

In 2020, the government agreed to a settlement package worth 1.8 billion AUD ($1.17 billion), which included wiping out all debts and refunding payments that had been recovered with interest, but did not provide compensation for the victims’ suffering.

The National Anti-Corruption Commission will investigate five public servants and one public official to determine if they engaged in corrupt practices related to the scheme.