Robodebt Class Action Settlement Frequently Asked Questions

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

Robodebt Class Action Settlement Frequently Asked Questions

 

1. I have received letter titled ‘Your ‘Robodebt’ Class action settlement outcome’.

What does that mean?

In June 2021, the Court approved the settlement.

A settlement distribution scheme is now in effect.

The settlement distribution scheme deals with:

  • assessing Group Member’s entitlements,
  • notifying Group Members of their entitlements, and
  • distributing settlement payments to eligible Group Members.

From November 2021, Centrelink sent out letters to Group Members advising them whether they are eligible for a settlement payment. Not all Group Members will receive a payment. Your letter will contain information personalised to your circumstances.

 

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 is now in effect.

The settlement distribution scheme deals with:

  • assessing Group Member’s entitlements,
  • notifying Group Members of their entitlements, and
  • distributing settlement payments to eligible Group Members.

The majority of payments under the settlement distribution scheme will be finalised by roughly August 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. Do I have to do anything to receive a Settlement Payment?

No.

Group Members who were placed into an eligible category should expect to receive another notice from Centrelink in mid-2022 letting them know exactly how much they are entitled to as part of the settlement. This letter will also set out in detail how the amount was calculated.

We expect Centrelink to start making settlement payments shortly after these notices are received by Group Members. This process will be automatic, and you will not need to take any steps to receive your settlement payment.

 

5. Can I challenge the amount of my Settlement Payment if I disagree with it?

Group Members will be entitled to challenge the calculation of the settlement payment if they believe the calculation has been performed incorrectly. The review process has two stages. The first stage involves the calculation being reviewed by Centrelink. The second stage involves the calculation being reviewed by the Scheme Assurer.

The purpose of this process is to pick up any errors in the calculation of the settlement payment. The calculation is based on the amount the Group Member paid back to Centrelink for the debt and over what period of time.

An example of why a Group Member might want to challenge their calculation is if they made payments towards the debt that have not been considered in the calculation of their settlement payment.

The letter that each eligible Group Member will receive from Centrelink in mid-2022 will provide information about how calculations can be challenged.

 

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

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

 

All Group Members were advised of their category in the letter sent by Centrelink in November 2021.

 

7. 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’ circumstance 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 before refunding it.

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

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

 

8. 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”, are providing 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 is currently in the process of verifying the work of the Scheme Assurer to make sure that its calculations are accurate. 

If a Group Member does not agree 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. Centrelink’s phone number is 1800 171 846.

 

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

No. The deadline to opt out has now passed and all Group Members who did not object are bound by the terms of the settlement and cannot withdraw from it.

 

10. 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.

 

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

Yes.

We believe that the settlement 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.

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.

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.

 

12. 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.

 

13. 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.

 

14. 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.

 

15. 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 and for the work performed in assisting Group Members in the settlement scheme be deducted from the $112 million settlement sum. This means there are no out-of-pocket legal expenses for Group Members.

The Court appointed an independent expert costs referee to assist it to understand the amount of reasonable legal costs that in the running of the class action and the work performed in the settlement scheme.

 

16. 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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