Minister for the National Disability Insurance Scheme
Minister for Government Services

Media release: Commonwealth agrees to $112 million settlement on Income Compliance Program Class Action

16 November 2020

The Hon Stuart Robert MP

Minister for the National Disability Insurance Scheme
Minister for Government Services

The Commonwealth of Australia (the Commonwealth) and the Applicants in the representative class action known as Prygodicz v The Commonwealth have reached agreement for the settlement of the matter, which is now subject to final agreement of the parties and the approval of the Federal Court of Australia.

The class action relates to Centrelink debts raised by income compliance reviews since July 2015, which the Commonwealth refers to as its Income Compliance Program.

Separate to today's settlement, the Commonwealth has been processing refunds to certain Services Australia customers. As at 13 November, $705.9m had been refunded to 405,814 customers.

Under the settlement, the Commonwealth will make a payment of $112 million, in the nature of interest, to be distributed to eligible group members.

However, Gordon Legal may apply to the Court for an order that part of that sum be paid instead to Gordon Legal itself. The Commonwealth hopes that all of the $112 million reaches the affected individuals.

Both the Applicants and their solicitors, Gordon Legal, acknowledge that the Commonwealth’s agreement to settle the matter is not an admission of liability by the Commonwealth, and does not reflect any acceptance by the Commonwealth of the allegations that the Commonwealth, or any of its officers, had any knowledge of unlawfulness associated with the income compliance program.

Group members do not need to take any action at this stage. Further information will be provided depending on the decision of the Federal Court.

Page last updated: 17 November 2020