The Australian government has agreed to a settlement in a class action over its unlawful robodebt scheme.
A Federal Court trial was due to begin on Monday, but lawyers told the court they’d reached an in principle settlement.
It was previously revealed thousands of Australians would receive refunds totalling $720 million because of the scheme that matched Australian Taxation Office and Centrelink data to claw back welfare payments said to have been overpaid.
This was ruled unlawful last year by the Federal Court.
The class action settlement will need to be approved by a judge.
In a statement on Monday, a spokesperson from Gordon Legal said the settlement, if approved, would total more than $1.2 billion to be paid to about 400,000 people.
“We want to acknowledge the courage of the lead applicants; Katherine, Elyane, Steven, Felicity, Shannon and Devon, who led these proceedings on behalf of all Robodebt victims in pursuit of this class action, which has allowed this outcome to be achieved today,” Partner Andrew Grech said.
The class action was launched on behalf of people who received notices through the automated debt recovery process and began last year.
Speaking to reporters later on Monday, shadow minister for government services Bill Shorten said Labor would continue to push for a royal commission into the controversial debt-recovery scheme.
“Today, it means that 400,000 victims of the government’s illegal protection racket … these people have got some justice,” he said.
“This is a good day for them, but I think the rest of Australia, and the people who were damaged by this process can say: ‘who was responsible?'”
Mr Shorten questioned why it had taken a class action for the government to respond to victims’ concerns.
“You shouldn’t have to go in the biggest class action in Australian history to get this government to adhere to the law,” he said.
“We have got to make sure this never happens again.”
Earlier this year, Prime Minister Scott Morrison apologised in Parliament for any “hurt or harm” caused by the scheme.
“Of course, I would deeply regret – deeply regret – any hardship that has been caused to people in the conduct of that activity,” he said.
On Monday, Mr Shorten called on government ministers responsible for the scheme to be held to account for the court verdict.
More to come
