Now lawRights & Fairness Introduced in the House of Representatives, 10 Sep 2026

Robodebt victims now keep their payouts in full

Some people are getting money from the Robodebt court case deal. Centrelink, Veterans' Affairs and the disability support scheme will not take any of it back. Their pensions and payments will not drop because of it.

Official name: Knox Class Action (Facilitation) Bill 2026

Who it affects

• People in the Knox Robodebt group court case: They get their payment in full. The government takes nothing back under these three laws.
• People on Centrelink payments: The payout will not count as income, so their payment stays the same.
• Veterans on income support: The payout will not count as income or an injury payout under veterans' law. Their support is not cut.
• People on the disability support scheme: The agency that runs the scheme cannot take back costs from the payout. It cannot cut future plans because of it.

Robodebt wrongly claimed $1.76 billion

Robodebt was a government scheme that started in July 2015. It used income facts from the Australian Taxation Office. It used them to work out if people on welfare had been paid too much. Then it said they owed money.

The method broke the law. The scheme officially ended in June 2020. By then, the government had wrongly claimed debts of at least $1.763 billion from about 433,000 Australians.

It got back about $751 million from about 381,000 of them. Sometimes it used private debt collectors.

A Royal Commission later looked into it. That is the strongest kind of public investigation. It found the scheme harmed poor and struggling people on income support. It found the scheme was not fair and not legal.

The class action settlement

A class action is a court case that one or more people bring for a large group. The first Robodebt class action started in November 2019.

In 2021, the Federal Court approved a deal to end it. The Federal Court is a national court that hears many cases against the government. The deal paid $112 million in interest to some people in the group. Interest here means extra money for the time they went without their money.

The Royal Commission then found something new. Some federal officials knew the scheme broke the law, or did not care. So in September 2024, Nathan Knox and David Mandell went back to court about the old deal, for the group. This is the Knox case.

The government agreed to a new deal in September 2025. The Federal Court approved it on 23 June 2026. The court called Robodebt a "fiasco". It said people's suffering was too big to measure and was still going on.

Under the deal, the government pays $548.5 million in total. Of that, $475 million is for people in the group. The company that paid for the case takes 15 per cent of that.

Up to $13.5 million covers legal costs. Up to $60 million covers running the payout system.

There are two kinds of payments. One is a set amount. The other is worked out for each person. This law covers both.

The problem being fixed

Some people get a lump sum to settle a claim for an injury. Usually, that can affect their welfare. Three laws set the rules.

They are the Social Security Act 1991, the Veterans' Entitlements Act 1986 and the National Disability Insurance Scheme Act 2013. These are the laws for welfare payments, veterans' payments and the disability support scheme.

The payout might count as a payment for an injury. Then Centrelink or Veterans' Affairs could set a time when you cannot get some payments. It could start back when the Robodebt was first raised.

Any payments you got in that time could be taken out of your payout before you saw it.

The payout might count as income instead. Then it could be spread across 52 weeks. For a set payment, that would add about $38.50 or $67.30 to your income each fortnight. That could cut your payment or stop it.

There is also the disability support scheme. The agency that runs it must take back its costs from payouts for an injury. It can also cut future plans because of the money.

Welfare and veterans' payments

The law adds a new rule to the Social Security Act. A Knox payment is not a payout for injury. It is not income under that law either.

It adds the same two rules to the veterans' law. So veterans on income support are treated the same way.

Say you get a Centrelink payment and you get a set Knox payment. Your Centrelink payment will not drop. None of your Knox payment will be taken back to cover past Centrelink payments.

The NDIS change

The law also changes the disability support scheme law. A Knox payment is not a payout for injury under that law.

So the agency that runs the scheme cannot take back past support costs from the payout. It also cannot use the payout to cut a person's future plan.

Start date

The government brought the bill to the House of Representatives, the lower house of Parliament, on 10 September 2026. The House passed it on 15 September. The Senate, the other house of Parliament, passed it on 17 September 2026.

The Governor-General is the King's representative. He signed it into law on 18 September 2026. It became Act No. 91 of 2026. The changes started the next day.

People who chose the set payment should start getting money by December 2026.

Tanya Plibersek is the Minister for Social Services. She said a separate law would stop the payouts being taxed. She said it would come before the end of the 2026-27 tax year.

Its journey through Parliament

Official sources

• Bill page on aph.gov.au
• Text of the bill
• Explanatory memorandum
• Bills Digest

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