Knox Class Action (Facilitation) Bill 2026

Ms ROBERTS (Pearce) (17:37): The incorporated speech read as follows— I would like to speak to the Knox Class Action (Facilitation) Bill 2026, which is legislation that delivers on a solemn promise to the victims of the robodebt scandal—that the compensation they are owed will be received in full, without penalty, without reduction and without retraumatisation by the very system that harmed them.

This bill is not about creating a precedent. It is about recognising an extraordinary and unique injustice—an illegal government scheme that the royal commission found was 'crude and cruel' and 'neither fair nor legal' and which knowingly inflicted harm on economically and socially disadvantaged Australians, many of whom were vulnerable. The robodebt scheme was a shocking and deliberate case of maladministration, perpetrated knowingly by ministers of the former coalition government.

It caused pain and trauma for more than 400,000 people across Australia. Former ministers boasted they would save taxpayers $4.7 billion. Instead, it has cost the Commonwealth more than $2 billion and, far more importantly, it has cost lives, livelihoods and trust in government.

We cannot forget the rhetoric that accompanied this scheme: We will find you, we'll track you down, you will have to repay those debts and you may end up in prison. That was the tone of a government that saw vulnerable Australians not as citizens to be served but as targets to be pursued. When the Albanese Labor government came to office, we made establishing a royal commission one of our first priorities.

That commission heard countless tragic stories of people being hounded by their government to repay debts they didn't even owe. Its conclusion was unequivocal: robodebt was a fiasco in public administration and a lack of ministerial responsibility and competent oversight. The human cost of this scheme cannot be overstated.

The royal commission linked the scheme to at least three suicides and identified a significant number of additional deaths that may have been connected, though aggregate suicide figures could not be reliably established. People reported feeling like criminals, traumatised on the off-chance they might have owed money. The psychological costs included stress, trauma, depression and suicidal ideation.

Many wrongly accused citizens reported mental health problems, such as anxiety and depression. Victim testimony before the commission included accounts of suicidal ideation, with one person describing driving home in despair thinking they could drive their car into a tree. The experience left lasting trauma, leading many to distrust the welfare system entirely.

This government has a strong record of ensuring justice for robodebt victims. We accepted, or accepted in principle, all 56 recommendations of the royal commission. To date, 52 of those 56 recommendations have been fully implemented, with implementation of the remaining four measures ongoing.

Key reforms include delivering a new debt-management program for Services Australia and ceasing the use of external debt collection agencies; introducing mechanisms to ensure all new programs and schemes are developed with a focus on the real people affected by policy changes; passing legislation last year to make social security debt fairer, including raising the small debt waiver to $250 for the first time in 30 years, resulting in around 1.2 million debts waived or not raised in 2025-26; and expanding the special circumstances debt waiver to better protect victims-survivors of family and domestic violence from coercive social security debt.

In September 2025, the Commonwealth reached agreement in the Knox class action for the harms caused by robodebt, covering a cohort of approximately 168,000 eligible class action members, with around 125,000 registered claimants. The settlement makes $475 million available to compensate eligible group members, which is the largest class action settlement in Australian history.

The Federal Court approved this settlement on 23 June 2026. Payments can be made as either fixed payments or by individualised assessment, compensating eligible individuals for a range of economic and non-economic losses. Eligible participants include those who received robodebt notices between 2015 and 2019 and meet specific criteria related to the harm suffered.

This covers Centrelink welfare recipients who had debts incorrectly raised via automated income averaging, were forced to repay debts they did not owe, experienced suspension or cancellation of payments due to disputed debts or were part of the original Knox v Commonwealth or Prygodicz v Commonwealth class actions. Under normal circumstances, lump sum compensation payments like these may be subject to taxation, income testing arrangements and Commonwealth statutory recovery schemes.

That means amounts may be withheld and entitlements to benefits like social security or veterans' payments, NDIS supports and aged-care contributions can be impacted. Let me be clear: we are not changing the normal operation of this system with this bill. There are good reasons for it generally to work this way.

What we are doing is making an exception because of the extraordinary and unique circumstances of the robodebt scheme. We could not accept a circumstance where someone lost their pension because they were being compensated as a robodebt victim. We will not allow a situation where a robodebt victim has a debt raised against them because they have received a compensation payment through this settlement scheme.

We will not have people retraumatised by the system that inflicted harm upon them in the first place. Consider the situation we would create if we did not pass this bill. A person who suffered through the terror of being pursued for a debt they did not owe—who may have lost their home, their relationship, their mental health or, in the most tragic cases, their life—would receive compensation for that harm.

But then, under normal rules, that compensation could be treated as income. Their pension could be cut. Their NDIS supports could be reduced.

They could be told they now owe money back to the Commonwealth because they were finally given some measure of justice. That would be unconscionable. It would compound the original injustice with a new one.

It would tell victims that their suffering matters but only up to a point—only until the compensation triggers another round of means testing, another letter from Services Australia and another sleepless night wondering if the government is about to take back what it just gave. This Albanese Labor government says enough—no more letters, no more threats and no more trauma.

This bill amends three key pieces of legislation to ensure Knox settlement payments are treated fairly. It amends the National Disability Insurance Scheme Act 2013 to exempt Knox settlement payments from recoveries and reductions to the funding of reasonable and necessary supports in participants' plans. It will also amend the Social Security Act 1991 and the Veterans' Entitlements Act 1986 to prevent Knox settlement payments being classified as income or compensation for the purposes of those acts.

Additional exemptions, including an exemption from income tax, will follow and are to be legislated before the end of the 2026-27 tax year. The compensation payments are set to be paid out to victims before the end of 2026. For many recipients of these settlement payments, interaction with the social security system was itself a source of distress during the operation of robodebt.

It is not appropriate that people should be required to re-engage with those systems, navigate complex assessments or face uncertainty about the treatment of compensation paid in recognition of harms caused by robodebt. This bill removes that uncertainty and the potential for further distress. Gordon Legal has been appointed as the scheme administrator, responsible for assessing claims, calculating individual entitlements and overseeing distributions.

Registration for the enhanced settlement closed earlier in 2026, with provisions for late applications considered on a case-by-case basis by the court. Payments are anticipated to commence in the coming months, though the exact schedule depends on the volume of claims and verification requirements. The circumstances surrounding robodebt and the royal commission process set this matter apart from other cases in which the Commonwealth may be found liable.

This bill should be understood in that context. It does not create a precedent. It is important that this bill passes quickly through both houses of parliament to ensure settlement payments to robodebt victims are not delayed.

It is a duty of this parliament to do all it can to address the toxic legacy of robodebt and ensure that nothing like it can ever happen again. We have to ensure the victims of robodebt get what they are owed as part of this historic settlement process. The swift passage of this bill will demonstrate the parliament's commitment to ensuring that those affected by robodebt receive fair, meaningful and lasting redress and that the toxic legacy of robodebt is banished for good.

This bill is about more than money. It is about dignity. It is about saying to every person who was terrorised by robodebt, 'We see you, we hear you and we will not let the system hurt you again.' It is about acknowledging that the harm done was not only financial but also human, personal and profound.

Some will say this is unusual legislation. They are right. The robodebt scheme was unusual in its cruelty, unusual in its illegality and unusual in the scale of its failure.

Ordinary rules do not apply to extraordinary wrongs. To the victims of robodebt: this parliament stands with you. This government will not rest until every person who was harmed receives the justice they deserve.

And, when the compensation payments arrive, they will arrive in full because you have already paid enough. I commend the bill to the House.