Class action initiated over government’s robodebt scheme

A class action lawsuit is being launched against the federal government on behalf of people who were affected by its robodebt scheme.

The action, initiated by law firm Gordon Legal, is challenging the government’s use of a flawed calculation system to unlawfully take back tens of millions of dollars from many thousands of Centrelink recipients, including pensions.

The firm said it is investigating whether more than 400,000 debt notices issued by the agency after July 1, 2016 lawfully entitled it to recover the amounts claimed.

The legality of the robodebt “one-size-fits-all online compliance scheme was first raised with the law firm by the shadow minister for government services, Bill Shorten.

Gordon Legal senior partner, Peter Gordon, said on Tuesday that investigations reveal that between $200 million and $300 million has been wrongly taken from people. Many were even hit with penalties of 10 per cent on amounts, he said.

“These people are the least able groups to afford the heavy-handed actions which are based on a system that used ATO averages that didn’t take into account individual circumstances,” Gordon said.

“The unfair and incorrect assumptions had a devastating financial impact of people’s lives. The emotional distress for people who have done nothing wrong has been high. The robodebt system put debt collectors onto innocent people to chase unlawful debts.

“They have been unfairly and financially disadvantaged and must be repaid with interest, penalties dropped and damages paid,” he said.

He said the amounts owed will vary from case to case but the average repayments could be a few thousand dollars which is vital from a financial and wellbeing perspective for people who are least able to afford it.

“The people in this class action were not gaming the system. They had honest claims to payments and allowances that robodebt wrongly assessed, penalised and pursued with harsh consequences.”

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