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What the Settlement Distribution Scheme was
The Commonwealth and Gordon Legal settled the robodebt class action. The Federal Court approved the settlement on 11 June 2021.
The Commonwealth made settlement payments to eligible, registered class action members in place of interest on money they paid back on robodebts.
Eligible, registered class action members got settlement payments in September 2022.
The plan for distributing settlement payments was set out in the Settlement Distribution Scheme Implementation Plan. It was a requirement of the settlement agreement. It explained how the Commonwealth did the following:
- worked out who was eligible for a settlement payment
- found and told class action members the settlement outcome and their eligibility
- gave options and a timeframe for class action members to dispute their eligibility, if they wanted to
- calculated and distributed settlement payments.
The Commonwealth appointed an independent Scheme Assurer. This was a Federal Court requirement. They ensured the settlement distribution was equitable and completed in line with the settlement agreement.
How we implemented the scheme
We had to complete a number of steps before we started making settlement payments. The Implementation Plan for the Settlement Distribution Scheme gave a timeframe for each step.
The Scheme Assurer and Gordon Legal reviewed and confirmed each step of the plan was complete before we progressed to the next step.
Key steps in the distribution process were:
| Phase | Action |
|---|---|
| Phase 1 |
Categorisation: Services Australia identified class action members who would and wouldn’t get a settlement payment. Timeframe: Completed in October 2021. |
| Phase 2 |
Notification: We worked out the category of each class action member’s debts. We wrote to class action members and let them know if they were eligible for a settlement payment or not. We also explained how they could get more information, ask for a review and update their preferred payment destination. Timeframe: Completed. We notified class action members of their debt category in November 2021. Class action members who needed to register a payment destination had until 11 February 2022 to do this. |
| Phase 3 |
Calculation and payment: We worked out how much to pay each eligible registered class action member. We wrote to all eligible and registered class action members to tell them how much they’d get. We did this before we paid them. Timeframe: Completed in September 2022. |
Who was eligible
Class action members were eligible for a settlement payment if they paid money towards a debt that was based in full, or in part, on averaged Australian Tax Office (ATO) income information.
Not every class action member was eligible for a settlement payment.
Class action members who didn’t pay any money back towards a robodebt were not eligible for a settlement payment.
Each debt fell into one of the following categories:
| Category | Outcome |
|---|---|
| Category One, Not Eligible |
Class action members whose debts were based on averaged ATO income information and who made no repayments. These class action members had their averaged debt zeroed. This meant they did not have to repay the debt. These class action members didn’t get a refund, or a settlement payment. |
| Category Two, Eligible |
Class action members whose debts were partly or wholly based on averaged ATO income information, and had made a repayment towards those debts. These class action members got a settlement payment. This payment was in addition to the refund that these class action members got under the government’s announcement on 29 May 2020. |
| Category Three, Eligible |
Class action members whose debts were initially based on averaged ATO income information, but were later recalculated using payslips or bank statements, and had overpaid the recalculated debt. These class action members got a settlement payment for the overpaid amount of their recalculated debt, even if the overpayment was refunded or applied to pay a valid debt. This group did not get an additional refund under the former government’s announcement on 29 May 2020, as any original overpayment would’ve been refunded at the time of recalculation. |
| Category Three, Not Eligible |
Class action members whose debts were initially based on averaged ATO income information, but were later recalculated using payslips or bank statements, and they hadn’t overpaid the recalculated debt. These class action members didn’t get a refund or a settlement payment. |
| Category Four, Not Eligible |
Class action members whose debts weren’t based on averaged ATO income information. These class action members didn’t get a refund or a settlement payment. |
How we calculated and distributed payments
The amount eligible registered class action members received as a settlement payment depended on all of the following:
- when they paid money towards eligible debts
- how much they paid
- when they were refunded
-
how many eligible class action members registered for a settlement payment.
Settlement payments were calculated in a similar way to interest. We used the interest rates set by the Federal Court to calculate each class action member’s portion of the agreed settlement sum.
Where to get more information
You can read the full Settlement Distribution Implementation Plan:
- Settlement Distribution Scheme Implementation Plan
- Settlement Distribution Scheme Implementation Plan.
A previous version of the Settlement Distribution Scheme Implementation Plan was originally published on 11 February 2021. You can view the previous version here: