450,000 Aussies to receive share of $550 million govt refund

The government has conceded defeat over its controversial robodebt scheme. Source: Getty

The federal government has reportedly conceded defeat over its controversial robodebt scheme, which saw thousands of Aussies on welfare hit with automatic debt recovery notices, and their income support payments suspended.

Private documents show the government will be forced to refund more than 400,000 Aussies on welfare to the tune of $550 million dollars, according to the Guardian.

The government also reportedly revealed it expected to lose to an upcoming class action against the debt recovery scheme, initiated by former Labor leader Bill Shorten and led by Gordon Legal.

The leaked ministerial submission to cabinet from ministers Stuart Robert, Anne Ruston and Christian Porter reveal Services Australia estimates it will administer 449,500 refunds over the 12 months from July this year.

“Services Australia estimates that it will administer 449,500 refunds determined under the programme, and their associated repaid debts would be refunded commencing in July 2020 and concluding within 12 months,” the document said.

It also conceded it was likely to lose the class action.

“Advice of prospects from Senior Counsel is that if the class action proceeds to hearing, it is very likely that the Applicants will succeed on unjust enrichment in respect of recipients who had debts raised, or partly raised, on the basis of averaged ATO income data,” the document stated.

Robodebt class action

Bill Shorten announced Gordon Legal would take on the government in a class action in September last year, saying the scheme was “very likely illegal”.

The federal court in November ruled robodebt was ‘unlawful’, a verdict which came days after the government conceded it would need to stop sending automated debt letters to welfare recipients without having a human officer check them first.

Over 10,000 Australians had signed up to join the class action by February this year, which was expected to enter mediation before a court hearing in July. 

Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, news and tech news.

Follow Yahoo Finance Australia on FacebookTwitterInstagram and LinkedIn.