Knox Class Action (Facilitation) Bill 2026
Dr RYAN (Kooyong) (16:33): In June this year, the Federal Court approved a settlement in which the Commonwealth would pay $475 million as compensation for the harms caused by the illegal and immoral robodebt scheme. This was known as the Knox settlement. It was the largest class action settlement in Australian history.
It was a settlement commensurate with the scale of the damage and the ruin caused by robodebt. The Royal Commission into the Robodebt Scheme found that the Australian government's scheme harmed economically and socially disadvantaged people who are in receipt of income support payments. Robodebt was illegal.
In approving this settlement, the Federal Court described robodebt as 'a fiasco in public administration and an abrogation of ministerial responsibility and competent oversight'. It said that the suffering experienced by affected individuals was 'immeasurable and ongoing'. I have heard from people who were damaged by the robodebt scheme of the ongoing hurt and dismay they have experienced as a result of what was, effectively, victimisation by the federal government.
The $475 million settlement will compensate eligible members of the Knox class action for the harms caused by robodebt. Without the Knox Class Action (Facilitation) Bill 2026, some of that compensation could effectively be taken back by the Commonwealth. The bill exempts Knox settlement payments from the compensation and income tax provisions that would ordinarily apply under Australia's social security and veterans' affairs systems.
It also ensures that payments are not treated as compensation under the National Disability Insurance Scheme. That means that recipients will not have their social security or veterans' affairs payments reduced or diminished entirely because they receive such a settlement. They won't have to repay amounts to the Commonwealth under the relevant compensation provisions, and the settlement payment won't affect their NDIS supports through the compensation provisions.
Victims of robodebt certainly deserve to access full NDIS social security and veterans' affairs payments. People who are harmed by an unlawful government scheme shouldn't be penalised again when the government compensates them for that harm. They deserve to stand on equal ground.
They deserve to receive compensation for the harm that they experience without that compensation impacting other ongoing supports that they receive and need. And so I unreservedly endorse this bill. But we still have much to do to ensure that such a deliberate distortion of government policy can never happen again.
In fact, as automated decision-making becomes more common in government, we are more exposed every day to a potential repeat of robodebt. It's now been more than 10 years since robodebt was introduced and three years since the royal commission found that the Automated Debt Recovery Scheme at its basis was unlawful. But we're still waiting for a government commitment to introduce transparency and appropriate safeguards when automated decision-making tools are used by Commonwealth departments.
In 2023, the royal commission made two important recommendations. Recommendation 17.1 called for a consistent legal framework for automation in government services, including clear pathways for review, transparency about where automated decision-making is used and capacity for independent experts to scrutinise the business rules and algorithms behind those systems.
Recommendation 17.2 called for a body with the power to monitor and audit automated decision-making, including its technical operation and its impacts on fairness, bias and usability. Those recommendations were based on the acknowledgement that robodebt happened, deaths happened and lives were ruined because an automated system was used by the government without adequate safeguards, transparency and accountability—without responsible human oversight.
The royal commission warned that, as automated systems become more sophisticated, and as they are deployed at greater scale, their potential to cause harm will also increase. The government has accepted recommendation 17—a recommendation, let's remember, that was made three years ago. But, as yet, it has made no substantive progress on its implementation.
Last week I seconded the member for Curtin's private member's bill, the Automated Decision-Making (Safeguards and Transparency) Bill 2026. That bill implements recommendation 17.1 and 17.2 of the robodebt royal commission. It would a introduce legal framework establishing a set of safeguards and transparency requirements to guide the use of automated decision-making across Commonwealth departments and agencies.
It would take a risk based approach, prohibiting automated decision-making where it would produce an unlawful outcome, where the decision requires genuine human discretion, when no explanation of the outcome can be given or where it would have an unjustified adverse impact on human rights. It would establish those circumstances in which additional safeguards are required.
It would establish a body to monitor the use of automated decision-making in government, including through publication on a new Commonwealth automated tools register maintained by the Ombudsman. This issue has now become particularly urgent in aged care, where the integrated assessment tool is being used as part of the assessment system that determines the classification, type of care and priority of older Australians who are seeking aged-care services.
For the better part of a year the automated tool has now been determining supports for some of Australia's most vulnerable people. Assessors have been unable to override the findings of that algorithm but, for the one in five older Australians who are able to seek a review of the tools decision, the review found that its decision-making was wrong. The minister's rapid review into the integrated assessment tool is now two weeks overdue but it is unlikely to offer human oversight embedded within future iterations of the assessment pathway.
I've repeatedly raised concerns in this House that this flawed algorithm could result in robodebt 2.0—robodebt aged care—but, equally, we could soon face robodebt NDIS or robodefence. As the government looks to deliver services more efficiently and more cheaply, automation is only going to grow in influence across government. It is already increasing across the board.
In the NDIS, it's being used both to determine eligibility for support and to set the level of support that recipients receive. Automation is being used more and more in social security payments, immigration determinations, environmental assessments and healthcare processes. That's not necessarily a bad thing, but it will prove a false economy if it creates errors and if it harms people at scale and leaves the Commonwealth paying to fix its mess again.
The Commonwealth has ultimately agreed to pay $475 million, plus $73 million in administration costs—over half-a-billion dollars—to compensate Australians who have been harmed by robodebt. This is not an argument against automation; it's an argument against automation without safeguards. Last year, 27 civil society signatories joined with ACOSS and wrote to the Attorney-General about the need for further safeguards.
So while I commend this bill to the House and I applaud the protections that it provides to victims of robodebt I also implore the government to urgently legislate safeguards over automated decision-making so that we don't end up here again, debating compensation for the victims of robodebt 2.0.