Where is my Robodebt settlement payment?

Q: How much compensation will I get from the robodebt class action?

However, there wont be a big pay day coming for most of the eligible 400,000 or so class action members - almost half will receive less than $100. Around 30 per cent of class action members will be paid between $100 and $300. A small minority, about 5 percent, of robodebt victims will receive more than $1000.

victims will find out from today how much their share of a $112 million settlement payment awarded as part of a $1 billion class action will be.

Table of Contents Show

What is Robodebt?
Why are the payouts so small?
How were the payments calculated?
What do I do now?
Has anyone received their robodebt settlement yet?
How much is robodebt settlement per person?
What's happening with robodebt settlement?
How much compensation will I get from the robodebt class action?

However, there won't be a big pay day coming for most of the eligible 400,000 or so class action members - almost half will receive less than $100.

Around 30 per cent of class action members will be paid between $100 and $300.

A small minority, about 5 percent, of robodebt victims will receive more than $1000.

READ MORE: 'My son could still be here': Mum welcomes robodebt royal commission

Robodebt victims Katherine, Felicity and Ella were three of the lead plaintiffs in the class action. (Supplied)

Services Australia says it is sending out letters to class action members from today and payments will arrive in bank accounts by the end of the month.

The money amounts to the interest owed to victims who repaid unlawful debts issued under the disastrously flawed scheme, which ran from July 2015 to November 2019 and is set to be the subject of an upcoming royal commission.

As part of the class action settlement, Centrelink has already repaid the $751 million that was wrongly recovered from 381,000 people.

What is Robodebt?

When Robodebt was rolled out in 2015 it was hailed by the government as a key tool to be used in tracking down welfare fraudsters.

The automated scheme made use of data matching algorithms. It assessed annual income data from the Australian Tax Office against fortnightly Centrelink welfare payments.

But Robodebt's averaging system used to calculate debts was problematic and in some cases inaccurate. It was declared unlawful by the Federal Court in 2019.

Gordon Legal's class action lawsuit led to the government agreeing to repay all of the unlawful debts.

It also led to the $112 million settlement now being paid out.

Why are the payouts so small?

Robodebt was described by Justice Bernard Murphy - the presiding judge over the class action - as "a shameful chapter" and "massive failure in public administration".

Robodebt victims have spoken about the financial and mental distress the unlawful debts caused. Many had their wages and tax refunds garnished to pay off the debts or were chased by debt collectors.

Some family members have linked the debts to suicides, including Queensland mum Kath Madgwick, whose son Jarrad took his own life after receiving a debt.

Centrelink has been using an unlawful averaging system since the 1990s, and possibly even as far back as the eighties. (Supplied)

Why then, are most victims only receiving what amounts to loose change?

This is because the settlement amount relates only to the interest owed. It is not compensation for any of the pain and suffering endured by Robodebt victims.

Damages were not included in the scope of the class action.

One of the key questions to be examined by the Robodebt royal commission, announced last month by Prime Minister Anthony Albanese, will be whether victims should receive compensation.

How were the payments calculated?

Every class action member will get a different payment according to how much interest they are owed.

Some robodebt victims repaid multiple debts. Class action members who made the earliest and largest debt repayments will get the highest settlement amount.

Gordon Legal's court-approved costs of $10.3 million were deducted from the settlement sum of $112 million.

This left $101.7 million to distribute to class action members.

Once the interest owed was calculated, there was also an amount left over which was divided amongst the class action members in proportion to their interest amount.

What do I do now?

You do not need to do anything to receive your payment. Centrelink will transfer the payment to your nominated bank account by September 30.

You can check your payment amount by logging into Centrelink through your MyGov account.

You don't need to report your settlement payment as income as it will not be classed as taxable income.

If you believe your payment is incorrect you can request a review from Services Australia as long as it is within 30 days of receiving your settlement payment.

Has anyone received their robodebt settlement yet?

Robodebt Class Action Settlement Those payments have now been made, and the opportunity to review your settlement payment has now passed. For assistance with any queries, you should contact Centrelink on 1800 171 846 or Social Security Rights Victoria on 03 9481 0355.

How much is robodebt settlement per person?

The more you paid back and the longer you went without this money, the larger your settlement payment will be. Around half of all settlement payments will be between $50 and $300. This amount is based on an average debt of $2000 and Centrelink holding on to that money for 2 years.

What's happening with robodebt settlement?

In November 2020, the Commonwealth and Gordon Legal agreed on a proposed settlement. The Federal Court approved the settlement on 11 June 2021. Eligible, registered group members will get settlement payments by 30 September 2022.

How much compensation will I get from the robodebt class action?

However, there won't be a big pay day coming for most of the eligible 400,000 or so class action members - almost half will receive less than $100. Around 30 per cent of class action members will be paid between $100 and $300. A small minority, about 5 percent, of robodebt victims will receive more than $1000.