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How the Robodebt settlement softens five years of pain for welfare recipients - ABC News

The Government's $1.2 billion compensation deal is a major milestone in the 'Robodebt' story.

The money is set to flow to victims in 2021.

But the saga may not be over yet.

If you can't tell your income averaging algorithms from your actual earnings, here's everything you need to know.

What's Robodebt?

It's the informal name given to a debt recovery program starting in 2015 that falsely accused members of the community of owing money to the Government.

The Robodebt scheme automatically issued notices to welfare recipients identified as having debts through a process of income averaging.

This compares a person's reported income with their income as measured by the Australian Tax Office.

While similar techniques were used in the past, the scale of Robodebt's debt recovery was unprecedented.

But in November 2019, the Federal Court of Australia found income averaging could not be solely relied upon to issue debts.

What happened this week?

A trial was scheduled for Monday pitting victims of Robodebt against the Government as part of a class action.

Minutes before it was to begin, the law firm representing the victims announced they had struck a $1.2 billion compensation deal with the Commonwealth.

If, as expected, settlement is approved by the Federal Court, then today's result is the start of the process by which victims will be paid compensation.

Why so much money?

The $1.2 billion is made up of:

The money covers repayment of the debts illegally raised by the Government, interest on the money paid by victims, and legal fees.

People line up outdoors beside a Centrelink sign.
The Government claims income averaging has been used for 20 or more years.(ABC News: Andrew O'Connor)

Who's getting it?

There are more than 400,000 people in the group who repaid a welfare debt in the period.

But people whose debts were calculated by reference to payslip or bank statement information, and not on ATO income averages, will not receive any money.

Instead, the money will go to people who had their debt calculated using averages derived from Tax Office information and made repayments.

Back of the envelope calculations mean victims will receive a few hundred dollars each on average, though individual circumstances will determine payments.

Representatives of the law firm Gordon Legal wouldn't say how much of the $112 million compensation fee it would be seeking.

Can I get money?

According to Gordon Legal, those who have received an email or letter from Centrelink since May 4, 2020, with a document entitled "Opt Out Notice — Federal Court of Australia — ‘Robodebt’ (Social Security Debt Collection) Class Action (VID1252/2019)" are part of the group who may receive compensation.

Some others may also be eligible, but it depends on if you received a welfare payment, updated employment information, and repaid a so-called debt.

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The Prime Minister expressed deep regret for people who suffered hardship due to the Robodebt scheme in June.

Is this how it ends?

Government Services Minister Stuart Robert has confirmed income averaging would cease, although improved payroll information sharing means it isn't as useful now as it once was.

He also argued income averaging has been in use for years.

"It's been a standard practice of debt collection processes of numerous government's going back to the Hawke and Keating government, but it is simply this Government now that is ceasing using this practice."

The Labor Party and the Greens are seeking to have the matter investigated by a royal commission.

Prime Minister Scott Morrison expressed "deep regret" for hardship caused by Robodebt in June.

But Mr Robert noted today "the Commonwealth has not accepted or admitted any liability in the matter".

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https://news.google.com/__i/rss/rd/articles/CBMiTWh0dHBzOi8vd3d3LmFiYy5uZXQuYXUvbmV3cy8yMDIwLTExLTE2L3JvYm9kZWJ0LXNldHRsZW1lbnQtZXhwbGFpbmVkLzEyODg4MTc40gEnaHR0cHM6Ly9hbXAuYWJjLm5ldC5hdS9hcnRpY2xlLzEyODg4MTc4?oc=5

2020-11-16 06:30:00Z
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