Australia Announces Record $2.4bn Compensation for Victims of Illegal Robodebt Scheme

Australia has agreed to pay record compensation to hundreds of thousands of people wrongfully targeted by the illegal “Robodebt” scheme, which falsely claimed many welfare recipients owed debts.

The government confirmed an additional $475 million in redress, bringing the total payout to $2.4 billion — the largest in the country’s history.

The Robodebt scheme, which ran between 2016 and 2019 under the then-Liberal National coalition government led by former prime minister Scott Morrison, used a flawed automated system that incorrectly calculated alleged welfare overpayments. The errors devastated some of Australia’s most vulnerable people, contributing to bankruptcies, family breakdowns, and at least three suicides.

Victims previously received $1.8bn in a 2020 class action settlement, but lawyers pushed for more after a royal commission revealed that senior officials knew the scheme was unlawful and pressed ahead regardless.

Attorney-General Michelle Rowland called the new payout “the just and fair thing to do,” acknowledging the serious harm inflicted.

Class action lawyer Peter Gordon said the result was an important victory: “Today is one more vindication of the principle that Australia remains a nation ruled by laws and not by kings — laws which even hold the government accountable.”

One victim, Felicity Button, described the announcement as bittersweet: “Irreparable mental health issues have stemmed from this… we can never compensate for that.”

The final redress package includes:

$1.76bn in debts wiped and refunds paid back

$587m in total compensation (including the new $475m)

$13.5m for legal costs

Up to $60m for scheme administration

This settlement surpasses Australia’s previous largest payout of $500m to survivors of the 2009 Black Saturday bushfires in Victoria.