Robodebt Class Action Settlement Frequently Asked Questions

  1. I have received a ‘Notice of Proposed Settlement’. What does that mean?
  2. Is the class action over now?
  3. What does the settlement cover?
  4. What are the categories of Group Members and how does the settlement apply to each category?
  5. Can I opt out of the settlement if I don't want to be part of it?
  6. Is the settlement a good result for Group Members?
  7. Do I have to do anything in relation to the settlement?
  8. Why is it that some people are not getting a refund or a Settlement Payment?
  9. How will the settlement distribution scheme work?
  10. If I’m eligible for a Settlement Payment, how much will I receive and when will I be paid?
  11. Can I object to the settlement agreement?
  12. I’m not eligible for a refund or a Settlement Payment. Is there any way I can still challenge the debt?
  13. I'm eligible for a refund but it hasn’t been paid to me yet. What do I do?
  14. Are there any legal fees that I have to pay to Gordon Legal? If so, how will they be paid?
  15. I'm eligible for a Settlement Payment but I want to pursue my Robodebt claim against Centrelink further. Is that possible?

1. I have received a ‘Notice of Proposed Settlement’. What does that mean?

The Commonwealth, through Centrelink, was ordered by the Court to send Group Members a “Notice of Proposed Settlement” by 25 January 2021.  If you received that notice you can be sure that you are a Group Member.

In June 2021, the Court approved the settlement. A settlement distribution scheme will now come into place in order to assess Group Member’s entitlements, notify Group Members of their entitlements and distribute settlement payments to eligible Group Members.

2. Is the class action over now?

Yes.

In June 2021, the Court approved the settlement. Now that the settlement has been approved by the Court, the claims of all Group Members who did not opt out of the proceeding will be resolved in accordance with the terms of the settlement agreement.

A settlement distribution scheme will now come into effect to assess which Group Members have entitlements under the settlement, notify Group Members of their entitlements and distribute settlement payments to eligible Group Members. The majority of payments under the settlement distribution scheme will be finalised by May 2022.

Because a settlement has been achieved, there will be no trial in the Robodebt Class Action. 

3. What does the settlement cover?

In summary, the settlement involves the Commonwealth paying a further $112 million, minus legal costs, in compensation in addition to the refunds it agreed to make after the commencement of the Robodebt Class Action.

The Commonwealth has also agreed to refund and ‘zero’ approximately 470,000 Robodebts worth more than $751 million. 

The terms of the settlement ensure that every Group Member who had a debt raised and paid money back to Centrelink based on Centrelink’s use of averages derived from annual ATO income data will be refunded the money they paid or had taken from them for the Robodebt and be additionally compensated with a further settlement payment.

Group Members whose debts were based wholly on actual fortnightly income information such as payslips or bank statements, not ATO income averages, will not receive a settlement payment or a refund.

4. What are the categories of Group Members and how does the settlement apply to each category?

While all Group Members are bound by the settlement, not all Group Members will be entitled to the benefit of a declaration that their debt has been zeroed, repayment of the amounts they have already paid or a settlement payment.

Group Members have been allocated into different categories in the class action, depending on their individual circumstances, including the information used to calculate their debt and what happened to the debt after it was raised. This has been done to reflect the reality that not everybody’s experience of the Robodebt System was the same.

The table below provides a guide to the categories of Group Members and how the settlement applies to them:

Category

Description

Refund

Application of settlement

Category 1

  • Debt calculated wholly or partly on the basis of averaged ATO income information
  • No repayments made on debt

No

  • These Group Members’ debts will be ‘zeroed’ so that they do not have to be paid back in the future
  • These Group Members will receive the benefit of a declaration that the way that Centrelink raised their debt was invalid
  • These Group Members will not receive a settlement payment

Category 2

  • Debt calculated wholly or partly on the basis of averaged ATO income information
  • Some or all of debt was repaid

Yes

  • These Group Members’ debts will be ‘zeroed’ so that they do not have to be paid back in the future
  • These Group Members will receive the benefit of a declaration that the way that Centrelink raised their debt was invalid
  • These Group Members will receive an additional settlement payment

Eligible category 3

  • Debt calculated wholly or partly on the basis of averaged ATO income information
  • Debt subsequently recalculated by reference to fortnightly income information, such as payslips or bank statements
  • The amount of debt repaid prior to the recalculation was more than the amount of the recalculated debt

No

  • These Group Members’ debts will not be ‘zeroed’ and they must be repaid in the future, if there are outstanding amounts on the debt
  • These Group Members will receive an additional settlement payment to reflect the detriment they experienced as a result of paying back too much money before the debt was recalculated

Ineligible category 3

  • Debt calculated wholly or partly on the basis of averaged ATO income information
  • Debt subsequently recalculated by reference to fortnightly income information, such as payslips or bank statements
  • The amount of debt repaid prior to the recalculation was not more than the amount of the recalculated debt

No

  • These Group Members’ debts will not be ‘zeroed’ and they must be repaid in the future, if there are outstanding amounts on the debt
  • These Group Members will not receive a settlement payment

 

Category 4

  • Debt calculated wholly on the basis of actual fortnightly income information such as payslips or bank statements
  • No part of debt calculated by reference to ATO income averaging

No

  • These Group Members’ debts will not be ‘zeroed’ and they must be repaid in the future, if there are outstanding amounts on the debt
  • These Group Members will not receive a settlement payment

 

 

As part of the settlement, a settlement distribution scheme will come into effect that will assess the debts of all Group Members in order to determine what category the Group Member falls within. From August 2021, Centrelink will notify all Group Members of their categorisation and their entitlement, if any, under the settlement.

It is important to understand that Gordon Legal does not have information about which category a Group Member falls within. If you do not know which category you fall within, we recommend that you wait to be contacted by Centrelink.

5. Can I opt out of the settlement if I don't want to be part of it?

In approving the settlement, the Honourable Justice Murphy decided that the approximately 600 Group Members who lodged an objection to the settlement should be given the opportunity to “opt out” of the settlement if they do not wish to be part of it.

These Group Members will receive a letter from Centrelink within 8 weeks of the date of approval notifying them of whether they will receive a benefit under the settlement and how they can opt out, if they seek to do so.

If these Group Members decide to withdraw from the settlement they will not receive any benefit that they were entitled to under the settlement distribution scheme and they will not be bound by the “release” that Group Members give the Commonwealth as part of the settlement. This means that they will be able to make future legal claims against the Commonwealth in relation to Centrelink debts that were covered by the Robodebt Class Action.

We recommend that Group Members who objected to the settlement wait to receive their letter from Centrelink and consider that information carefully.

All Group Members who did not object are bound by the terms of the settlement and cannot withdraw from it.

6. Is the settlement a good result for Group Members?

Yes.

Whilst we understand that the settlement agreement will not provide financial redress for all Group Members and does not achieve all of the ambitions of every individual Group Member, on balance we believe it represents a fair and reasonable outcome for Group Members.

It is important to understand that in approving the settlement, the Court decided that the settlement was fair and reasonable in light of the risks that the claim would not be successful at trial and the benefit that it provides to all categories of Group Members.

The Court arrived at this decision after consideration of the objections made by Group Members and the input of the Contradictor, a senior barrister who the Court appointed to specifically represent the interests of Group Members in the settlement process. The Court would not have approved the settlement if it did not think it represented a fair and reasonable outcome for the Representative Applicants and the Group Members.

While running the Robodebt Class Action, Gordon Legal and the Representative Applicants gave deep consideration to how the case could achieve the best possible result within the limitations of the legal system that we operate within, for all Group Members.

However, in such a large class of people, opinions about the settlement are naturally diverse – it is inevitable that not everyone will agree.

In our view, the Robodebt Class Action has secured an important result by ensuring that all Group Members who were deprived of money as a result of invalid Robodebts will be refunded amounts paid on their debts and receive additional compensation.

For those Group Members who do not receive refunds or settlement payments, they at least now have certainty that their debts were not calculated by the invalid Robodebt System.

As a civil legal claim, the Robodebt Class Action’s focus was on financially assisting Group Members and providing greater legal certainty for people who were affected by invalid Robodebts, not on forcing political outcomes.

We understand and support the calls for greater accountability and hope that the Parliament will continue to question how the Robodebt System was allowed to cause so much harm to so many people.

It is also important to understand that the Court did not have power in this proceeding to Order that the Government provide a further apology to Group Members.

7. Do I have to do anything in relation to the settlement?

No, not at this time.

Group Members will be contacted with further information and details about their eligibility for payments under the settlement from August 2021. Some Group Members may be required to provide bank account details to Centrelink, but they will be notified by Centrelink if that is the case.

As a part of the notification process, Group Members will be told what category they fall into under the settlement, and why.

Group Members are entitled to challenge their categorisation under the settlement. An example of why a Group Member might want to challenge their categorisation is if Centrelink says that they are in category 4 and will not receive a refund or a settlement payment under the settlement but the Group Member thinks that their debt was in fact calculated by reference to ATO income averaging.

Information about how categorisations can be challenged will be provided in the notification that is sent to each Group Member by Centrelink.

8. Why is it that some people are not getting a refund or a Settlement Payment?

One of the complications involved in the Robodebt Class Action was that not all debts raised by Centrelink were calculated using the same method.

Most Group Members were issued with a debt that was raised as a result of Centrelink assuming that they had earnt money during the time they were receiving payments in equal, consistent amounts each fortnight. This is referred to as the averaging method. In some cases, that method was used for the whole of the asserted debt period, in others it was only used for part of the period.

Under the settlement, all debts raised through the averaging method, whether wholly or partially, will be refunded and each Group Member who had such a debt will receive a settlement payment.

A smaller number of debts were raised on the basis of actual income information, usually after payslips or bank statements were provided by the Group Member or otherwise obtained by Centrelink. Centrelink used actual evidence to calculate those debts and Centrelink is lawfully entitled to claim those amounts.

The settlement of the Robodebt Class Action has therefore assisted people who were targeted by Centrelink for debts calculated by the averaging method.  As such, the Group Members who received debts that were calculated using actual income information will not be refunded or receive settlement payments, and their debts must be repaid.

Some Group Members had a debt that was initially calculated on the basis of ATO income averages, but then recalculated after payslips or bank statements were provided by them, resulting in the debt amount being changed to a different amount. Those Group Members who paid back money prior to the recalculation that was more than the amount of the debt when recalculated will not be refunded but will receive a settlement payment. That payment will reflect the disadvantage those Group Members experienced as a result of having more money recovered from them than they actually owed, prior to the recalculation using actual evidence.

9. How will the settlement distribution scheme work?

Centrelink will perform the functions of categorising Group Members and assessing their entitlements, notifying Group Members of their categorisation and entitlements and distributing settlement payments to eligible Group Members. Gordon Legal and global accounting firm KPMG, who has been appointed as the “Scheme Assurer”, will provide oversight over Centrelink’s functions.

The Scheme Assurer will be responsible for:

  • providing assurance over Centrelink’s categorisation of Group Members, including sampling categorisations;
  • reviewing Centrelink’s IT system for the administration of the settlement distribution scheme; and
  • reviewing the calculation of eligible Group Members’ entitlements and Centrelink’s payment of those entitlements.

Gordon Legal will verify the work of the Scheme Assurer to make sure that its calculations are accurate. 

If a Group Member does not agree with their categorisation or how their compensation has been calculated under the settlement, they will have the opportunity to raise a dispute with Centrelink at first instance and, if Centrelink cannot resolve their dispute, to the Scheme Assurer. If the Group Member’s dispute remains unresolved, they can seek legal advice regarding their assessment, including from Gordon Legal.

Centrelink will also operate a phone line for Group Members to use to get answers to questions they have about how the settlement affects them. 

10. If I’m eligible for a Settlement Payment, how much will I receive and when will I be paid?

The amount that eligible Group Members will receive will be calculated and paid by Centrelink, with oversight from the independent Scheme Assurer and Gordon Legal.

Every eligible Group Members’ circumstances will be different, so it is not possible to give a precise indication of the amount that any individual will receive.

Put broadly, each eligible Group Members’ settlement payment will be calculated considering:

  • how much money was repaid or recovered because of the Robodebt; and
  • how long Centrelink held the Group Member’s money.

There are a number of steps that need to take place before Group Members will receive settlement payments, including Group Member assessment, verification, and calculation of the settlement payments.

We estimate that the majority of payments will be finalised by May 2022.

11. Can I object to the settlement agreement?

No. The time for Group Members to lodge objections has closed and the Court has approved the settlement.

12. I’m not eligible for a refund or a Settlement Payment. Is there any way I can still challenge the debt?

If your debt still stands because it was calculated on the basis of actual fortnightly income information (i.e. bank statements and payslips) and not on averages derived from ATO income information, the settlement does not stop you from requesting that Centrelink review your debt if you believe that your debt amount has been incorrectly calculated. While the debt may have been based on information that can validly support a debt, there may still be other errors or issues that Centrelink can resolve.

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:

  • In person at your local Centrelink office;
  • Over the phone by calling the number on your debt notice; or
  • Online via your myGov account by clicking on 'Complaints' and in the free text box write that you want a review by an ARO. Or you can download the Review of decision form from the Centrelink website

If an ARO reviews your debt and you still think the debt is wrong, you can review the debt at the Administrative Appeals Tribunal.

13. I'm eligible for a refund but it hasn’t been paid to me yet. What do I do?

There are a small number of people that Centrelink has identified who are eligible for a refund, but Centrelink has not been able to contact them.

If you think you may be eligible for a refund, but you have not been contacted by Centrelink, you should get in touch with them.

14. Are there any legal fees that I have to pay to Gordon Legal? If so, how will they be paid?

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. This means there are no out-of-pocket legal expenses for Group Members.

The balance of the settlement sum will be distributed to eligible Group Members, under the settlement distribution scheme, after those legal costs have been taken out.

In ordering the deduction for legal costs, the Court assessed the total amount of fair and reasonable legal costs involved with running the Robodebt Class Action over a period of approximately 18 months.

The Court appointed an independent expert costs referee to assist it in understanding the amount of reasonable legal costs that had been incurred in the running of the class action.

The Court considered evidence from the independent expert costs referee and Gordon Legal prior to making its decision on legal costs.

15. I'm eligible for a Settlement Payment but I want to pursue my Robodebt claim against Centrelink further. Is that possible?

No. Now that the settlement has been approved by the Court, Group Members who have not opted out will not be able to pursue similar legal claims to those that were made in the Robodebt Class Action.

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