The Australian Government has reached an agreement to settle Knox v The Commonwealth, an appeal from the original Robodebt class action settlement in Prygodicz v The Commonwealth.

The settlement of the appeal, still subject to approval by the Federal Court, would see the Commonwealth pay $475 million as compensation to eligible victims for the harms caused by the Robodebt Scheme. If approved by the court, this would be the largest class action settlement in Australian history.

This settlement would be in addition to the compensation paid following the original Robodebt class action settlement in late 2020, which comprised interest and repayments of wrongfully raised debts.

The agreement also allows the court to determine separate amounts for the Applicants’ reasonable legal costs (not exceeding $13.5 million) and for the reasonable costs of administering the settlement scheme (not exceeding $60 million).

In a media release, Attorney General Michelle Rowland said:

“Today’s settlement demonstrates the Albanese Labor Government’s ongoing commitment to addressing the harms caused to hundreds of thousands of vulnerable Australians by the former Liberal government’s disastrous Robodebt Scheme.”

“The Royal Commission described Robodebt as a ‘crude and cruel mechanism, neither fair nor legal’. It found that ‘people were traumatised on the off chance they might owe money’ and that Robodebt was ‘a costly failure of public administration, in both human and economic terms’.”

“Settling this claim is the just and fair thing to do.”

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