Gordon Legal's Peter Gordon (right) led the class action against the government on behalf of welfare recipients who were unlawfully forced to repay money.Credit:Justin McManus
Labor said it should not have taken a class action to trigger compensation and redoubled its push for a royal commission to establish who in the government knew about the scheme's flaws.
The"unlawful"robo-debt scheme forced welfare recipients to repay hundreds of millions in alleged debts that the government calculated they owed through what was ultimately revealed to be a flawed method.
In a brief hearing in the Federal Court in Melbourne on Monday,lawyers for Centrelink said the parties had reached an agreement,which will require the court's approval.
Law firm Gordon Legal,which is running the class action,said if the settlement was approved by the court then $1.2 billion in total would have been delivered to participants in the legal challenge since it started,including $112 million in compensation.
The government also agreed to drop $398 million in claimed debts,the firm said in a statement.
The robo-debt scheme was scrapped in May,with the Commonwealth announcing it would pay back $721 million to about 373,000 people,which is included in the $1.2 billion. It is not yet clear what portion of the $112 million will go to Gordon Legal's costs,which will be checked independently before being approved by the court.
Labor's government services spokesman Bill Shorten said the government had only"surrendered"because senior ministers and public servants may have had to give evidence during the planned trial.