Centrelink robodebt class action lawsuit enters next stage

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SYDNEY, AUSTRALIA - MARCH 21: A Medicare and Centrelink office sign is seen at Bondi Junction on March 21, 2016 in Sydney, Australia.  Federal public sector workers are set to strike across Australia over a long-running pay dispute.  (Photo by Matt King/Getty Images)

Centrelink is in the spotlight. Image: Getty

Australians logging into their MyGov account from Monday 18 May may notice a new feature: an unsubscribe notice for a Robodebt Class Action.

Class action law firm Gordon Legal and Shadow Government Services Minister Bill Shorten announced in 2019 that they would launch a class action lawsuit against the debt collection scheme.

Centrelink’s controversial robodebt scheme saw 686,901 debts raised, worth $1.4 billion. The program increased debts using a process called income averaging, which allowed Centrelink to calculate a beneficiary’s assumed income by averaging their reported income to the ATO.

Critics have claimed that the earnings average calculations are faulty and led to incorrect debt notices delivered to thousands of recipients.

The scheme, labeled as “illegal” by the Federal Court, has since been rolled back and hundreds of millions reimbursed.

But the class action lawsuit remains on track for mediation in June, said Gordon Legal lead counsel James Naughton.

The class action will be heard between July and September this year and is one of the largest in Australian history. It alleges Centrelink’s robodebt program has caused “significant and unnecessary detrimental financial impact on thousands of lives” since July 2015. It seeks repayment of “illegally claimed debts”.

“We hope [the mediation] will resolve the class action. If this is not the case, the case will be judged between July and September. Centrelink will notify people it believes are members of the group in the coming days,” Naughton said.

The Commonwealth has been required to notify potentially affected Australians of the class action and their right to opt out.

“If you have received a notice, then Centrelink believes you have been affected by a robodebt and are a class member in the class action. You have the option to opt out, but we recommend that you do not.

The law firm said it was now preparing to be contacted by hundreds of thousands of concerned Australians.

Gordon Legal has already received over 13,000 entries of interest. However, he believes the actual number of Australians affected is much higher.

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