Australia to pay additional A$475m in record Robodebt compensation
Labor government agrees extra payment after evidence showed officials knew the welfare-recovery scheme was unlawful
The Australian government has agreed to pay an additional A$475 million in compensation to victims of the so-called "Robodebt" welfare-recovery scheme, on top of a A$1.8 billion settlement reached in 2020. The extra payment, announced by Attorney-General Michelle Rowland on Thursday, follows fresh evidence that officials in the former Liberal–National coalition government knew the automated system was unlawful but continued to operate it.
Hundreds of thousands of people were targeted by the scheme, which used an automated process to notify welfare recipients that they had been overpaid and demanded repayment of debts that in many cases did not exist. The A$1.8 billion settlement reached in 2020 — about £876 million and $1.2 billion at the time — resolved a class action by people affected by those automated debt assessments. The new A$475 million payment is intended as further compensation for harms caused by the scheme, which government and lawyers described as illegal and immoral.
Rowland said the extra payment "is the just and fair thing to do," and that it reflected the harm caused to "thousands of vulnerable Australians" under what she called the "disastrous" program. The government has also set aside A$13.5 million to cover legal costs and up to A$60 million to establish and administer the additional compensation scheme.
The fresh payment follows an appeal by lawyers acting for the class of claimants after new documents and evidence indicated that senior officials were aware the automated debt-recovery method lacked lawful basis. The original 2020 settlement resolved claims that the system had wrongly generated debt notices and led to widespread financial and emotional distress; campaigners and lawyers say some people affected took their own lives.
The Robodebt scheme used automated cross-checking of income records to calculate alleged overpayments and issue repayment demands to social security recipients. That automated approach and the way it was applied became the focus of legal action and public inquiry after widespread complaints from clients of the social security system and advocacy groups.
The Labor government said it would implement the additional payments as part of a broader process to compensate those harmed by the program. Officials have said the administration of the scheme will include measures to identify eligible recipients and distribute payments, funded from the previously announced amounts for administration and legal costs.
Legal representatives for the class action sought the additional payment after the new evidence emerged and have been engaged in negotiations with the government to secure redress for claimants. The extra A$475 million brings the total payouts and associated costs related to the Robodebt litigation into the billions and is described by advocates as the largest compensation program in Australia’s history related to a public administration failure.
The government's move marks a significant development in the long-running controversy over Robodebt, which has been the subject of public scrutiny, parliamentary inquiry and multiple court proceedings. Officials said the settlement does not alter broader inquiries into how the scheme was designed and implemented and that it aims to provide tangible relief to those who were wrongfully pursued for debts.