On 16 November 2020, the Representative Applicants reached a settlement agreement with the Commonwealth. In June 2021, the Federal Court approved the settlement, which means that a settlement distribution scheme will come into effect to finalise the claims of all Group Members. The central aspect of the settlement is that most Group Members will receive a settlement payment in addition to the refund they have already received or will receive in the future.
For more information about the settlement, the settlement terms and how the settlement distribution scheme will operate, please visit the settlement FAQ page.
Following the commencement of the Robodebt Class Action in November 2019, on 29 May 2020 the Commonwealth announced a significant change in its position. In its May announcement the Government accepted that many debts raised under the Robodebt System were unlawful and, consequently, that it would refund approximately 470,000 debts to around 373,000 people. As a result, refunds of those amounts have been made to most but not all of the 373,000 Group Members to whom the announcement applied.
The Commonwealth has or will pay refunds to those people whose debts were calculated either wholly or partially on the basis of averaged ATO income data. This means that if your debt was calculated wholly on the basis of other information – such as payslips or bank statements – your debt will not be refunded.
If you are not due for a refund, this may be because the Commonwealth has not accepted that your debt or debts were calculated either wholly or partially on the basis of averaged ATO income data.
We understand that the Commonwealth has now paid almost all refunds. As a result of the settlement achieved in the Robodebt Class Action on 16 November 2020 and approved by the Court in June 2021, all Group Members who are eligible for a refund will also receive an additional settlement payment.
Only Group Members who had debts calculated as a result of Centrelink using ATO income averaging are entitled to refunds on any amounts already paid.
Gordon Legal does not have access to information about whether or not you are eligible for a refund. However, you can check whether you are eligible on MyGov, by following these steps:
If you are eligible for a refund but have not yet received it, you may need to provide Centrelink with updated bank account details so that they can process the payment.
The Government announced in May 2020 that they would commence paying back refunds from early July 2020. As at May 2021, the vast majority of refunds had been paid.
The refund will include the repayment of any money paid towards a Robodebt as well as interest charged on the debt.
The Government has confirmed that if your refund is a large amount, this will be paid back to you in instalments.
You can check if you are eligible for a refund by:
If your debt was one that has been refunded or withdrawn because it was calculated as a result of invalid income averaging, your tax return will not be garnisheed as repayment for that debt. If your debt is still owed to Centrelink, recovery actions, including garnisheeing your tax return, may be taken against you in the future.
Centrelink has confirmed that the refund you receive will not be taxed and no further action is required from you in relation to your tax return.
We understand that Centrelink has paid refunds to almost all eligible group members. A small number of Group Members have not yet received refunds because Centrelink do not have their current bank account details and have been unable to get in contact with them.
To update your details with Centrelink, you will need to:
Your refund will be paid to you within 5 business days of completing the ‘Refund pending’ task. Once your refund has been paid, Centrelink will send you a follow-up letter to confirm the refund amount and the details of the debt/s that were refunded.
If you have received an email or letter from Centrelink since 4 May 2020, enclosing a document entitled “Opt Out Notice – Federal Court of Australia – ‘Robodebt’ (Social Security Debt Collection) Class Action (VID1252/2019)” (the “Group Member Notice”), or if you received a “Notice of Proposed Settlement” from Centrelink in January 2021, then it is safe for you to assume that you are a Group Member. For reference, a copy of the Group Member Notice can be viewed here.
Centrelink debts arise for a variety of reasons, and not every debt is a Robodebt. For example, if you received a debt because Centrelink decided that you were not eligible for the payment you were receiving, this is not a Robodebt and you will not be a Group Member.
Eligibility to be a Group Member is determined by the 3-point definition below. In fact, anyone who meets this definition – even if they do not know about the class action – is a Group Member and will be bound by the settlement. Again, if you have received a MyGov message or letter from Centrelink enclosing the Group Member Notice, you can assume that you are a Group Member.
If you haven’t received a MyGov message or letter from Centrelink since 4 May 2020 enclosing the Group Member Notice you may still be a Group Member if you fit the definition below.
You are a group member if:
3. You have paid, or had recovered from you, any debt or part thereof (including through a payment plan, garnishing of tax return or payment of the debt in full).
No. The final day for opting out of the Robodebt Class Action was 29 June 2020.
The vast majority of Group Members who did not opt out by 29 June 2020 will be bound by the settlement agreement reached on 16 November 2020 between the Representative Applicants and the Commonwealth.
However, when the Honourable Justice Murphy approved the settlement in June 2021, he ordered that the approximately 600 Group Members who lodged an objection to the settlement be given the opportunity to opt out of the settlement if they do not wish to be bound by it. These Group Members will receive a letter from Centrelink notifying them of how they can opt out.
For more information about the settlement, please visit the settlement FAQ page.
Robodebts are a type of Centrelink debt that the Representative Applicants in the class action argued were unlawful. Centrelink has been raising Robodebts since approximately April 2015 and information released by the Commonwealth indicates that at least 470,000 Robodebts have been raised since the system was put in place.
A Robodebt is raised after Centrelink conducts a reassessment of a recipient’s entitlements to social security payments (this could be for a period as far back as seven years) and decides that the recipient was overpaid. Ordinarily, in conducting this reassessment Centrelink sends letters or other correspondence asking that the recipient “check”, “confirm” or “update” their past income information.
The key element of a Robodebt is the evidence used by Centrelink to calculate the overpayment and establish that a debt is owed. Robodebts are calculated by Centrelink applying averaged ATO PAYG income data across either part or all of the fortnights in which the recipient received payments and treating those averaged amounts as the recipient’s actual earnings in the relevant debt period. Therefore, the Robodebt system ignores what the person actually earned at the relevant time.
Robodebts are unlawful because the amount of social security payments a person is entitled to is based on how much the person actually earned when receiving payments – not the averaged ATO amounts. Because of this flaw, our clients argue that Centrelink has no lawful basis for raising a Robodebt. In its announcement on 29 May 2020, the Commonwealth admitted that the Robodebts it raised in this way are invalid.
As part of the settlement agreement reached between the parties, all Robodebts calculated by the invalid averaging method will be refunded and the recipients will receive an additional settlement payment to reflect the detriment they experienced by having the debt raised against them in that way.
If you do not know if your Centrelink debt was a Robodebt, you can find out by checking on MyGov whether you are entitled to receive a refund by following the steps below (remembering that all Robodebts are eligible to be refunded by Centrelink):
We were instructed to launch the Robodebt Class Action because of concerns that the Commonwealth of Australia raised unlawful debts against hundreds of thousands of Centrelink recipients through the Robodebt system.
The Robodebt Class Action was a vehicle to help those people who have received Robodebts by pursuing compensation for their losses, including the money that they paid towards Robodebts (or had taken from them) and the distress and inconvenience that they experienced along the way.
From a legal perspective, the Robodebt Class Action argued that the Commonwealth was unjustly enriched because of Centrelink’s operation of the Robodebt system. It also argued that the Commonwealth was negligent in breaching its duty of care to Centrelink recipients who had unlawful debts raised against them.
Before the Robodebt Class Action began, the Federal Court of Australia made orders which said that Centrelink had raised an unlawful Robodebt against one Centrelink recipient, Ms Deanna Amato. While this decision was important, it applied only to Ms. Amato. The Robodebt Class Action was designed to assist the whole class of people who have been affected.
As a class action, the proceeding was brought by a group of Representative Applicants on behalf of all of the other people affected.
On 16 November 2020, the Representative Applicants reached a settlement agreement with the Commonwealth. In June 2021, the Court approved the settlement, which means that a settlement distribution scheme will come into effect to finalise the claims of all Group Members. The central aspect of the settlement is that most Group Members will receive a settlement payment in addition to the refund that they have already received or will receive in the future.
For more information about the settlement and the settlement terms, please visit the settlement FAQ page
Yes. There is no reason why participating in the Robodebt Class Action as a Group Member would impact your eligibility to receive Centrelink payments.
Now that the settlement has been approved by the Court, Centrelink will contact all Group Members to notify them of how the settlement will apply to them and their entitlement, if any, under the settlement. There is no need to register your interest with Gordon Legal to be included in the settlement process or to receive a benefit under the settlement.
If you have another issue with Centrelink that is not about a Robodebt, we recommend that you consult the social security rights legal service operating in your state. Social security legal services provide free assistance over the phone to people who have issues with Centrelink payments, debts, and other problems. To find your relevant service, refer to the Economic Justice Australia webpage: http://ejaustralia.org.au/legal-help-centrelink/. Select your state here ACT NSW NT QLD SA TAS VIC WA
Details for the Victorian, Queensland and NSW services are listed here:
If your debt is not one that is eligible for a refund because it was not calculated by the invalid income averaging method, it may still have other errors that Centrelink can investigate in an internal review. This may lead to the debt amount being changed.
If you request an internal review, we recommend asking that an Authorised Review Officer conduct the review. This can be done in the following ways:
If an ARO reviews your debt and you still think the debt is wrong, you can review the debt at the Administrative Appeals Tribunal.
If your Centrelink debt relates to one of these payments, unfortunately this means that you do not fall within the scope of the Robodebt Class Action. This is because the Robodebt system was not applied to these payments.
For further assistance, you can contact Social Security Rights Victoria (SSRV), or the equivalent organisation in your state or territory.
SSRV is an independent state-wide community legal centre that specialises in social security and related law and policy. SSRV’s contact details are as follows:
If you are based outside Victoria, please refer to the Economic Justice Australia webpage to locate your nearest social security rights legal centre: http://ejaustralia.org.au/legal-help-centrelink/. Select your state here ACT NSW NT QLD SA TAS VIC WA
If your debt is not eligible for a refund because it was not calculated by invalid income averaging, your debt is still owing to Centrelink. You can check if you are eligible for a refund by following the steps below:
Gordon Legal conducted the Robodebt Class Action on a no-win no-fee basis, so that there would be no out-of-pocket legal fees for Group Members.
When the Court approved the settlement, it ordered that the legal costs incurred by the Representative Applicants in running the class action be deducted from the $112 million settlement sum.
The balance of the settlement amount will be distributed to Group Members under the settlement distribution scheme.
For more information about the settlement and the settlement terms, please visit the settlement FAQ page.
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