Centrelink recipients are “fuming” over a government settlement for the unlawful Robodebt program, as those wrongly hounded for debts they didn’t owe find out they will only get $300 for their trouble.

“That isn’t enough. It doesn’t make up for the torment,” one Robodebt victim, Nina, told The New Daily.

“May as well give me a Woolies gift card and send me on my way.”

On Monday, a landmark settlement was reached over the program, just as the case was due to begin in the Federal Court.

Gordon Legal said the government would pay $112 million in compensation and legal costs to nearly 400,000 class action members.

Government services minister Stuart Robert. Photo: AAP

Government Services Minister Stuart Robert said the money was “for interest payments for money held” and represented about 10 per cent of the total money refunded.

Robodebt, the nickname for the government’s income compliance program, was ruled illegal by the Federal Court because it had little human oversight, with countless people handed debts for money they did not actually owe.

The federal government suspended the program in February.

‘Shattered’ at settlement

A previous settlement saw the government agree to refund $720 million in debts already paid, and drop claims for $400 million still being chased.

Mr Robert said Monday that $705.9 million had already been refunded to 405,814 recipients as of last week.

All up, the full settlement represents more than $1.23 billion – but welfare recipients say they are upset at the $112 million settlement.

Each person will get an “individualised calculation”, Gordon Legal said.

On a simple averaging, the payment represents under $300 per participant.

“I’m fuming,” Nina, from Perth, told TND.

Robodebt was suspended in February. Photo: AAP

“That’s not compensation for the time I spent shaking telling a debt collector to send it back to Centrelink, getting upset by text messages and calls, especially the dreaded ‘you will be contacted by someone shortly’ one.”

She asked for her surname not to be published, saying she had been left traumatised by the process.

“It’s not compensation for the toll it took on my mental health,” Nina said.

Gordon Legal partner Andrew Grech said some participants in the class action would not receive any of the settlement, after their debts were found to be not linked to data-matching.

He said more than 380,000 people would share in the payment, in varying amounts based on amount of debt paid, how long ago they paid, and if any amount was still outstanding.

Nicki, from Brisbane, who also asked her surname be withheld, said she was “shattered”.

“I’m devastated that our pain and the crushing loneliness of the experience, and the impact it had on my family and others, was only worth that much,” she told TND.

Nicki disputed the $12,000 debt she was handed in 2017, but eventually agreed to pay after becoming frustrated with the appeal process.

TND is aware of many Robodebt recipients who felt forced to accept debts they disputed.

Nicki paid back about $3500, before the system was ruled unlawful and her payments were refunded.

Bill Shorten wants a Robodebt Royal Commission. Photo: AAP

“I stopped dreaming of owning anything big in the future, or taking holidays,” Nicki said.

“I accepted we’d be broke for at least 10 years and I’d just have to find ways to hide it from my little girls so they didn’t know.”

Mr Grech told TND the lead clients in the class action had accepted the settlement and were “happy with the outcome”.

Labor’s shadow government services minister, Bill Shorten, repeated his previous calls for a Royal Commission into Robodebt.

Activists unhappy with result

The fight against Robodebt began with a grassroots campaign from online activists as early as 2015.

A website called ‘Not My Debt’ collected stories of incorrect debts, uncovering a series of egregious errors and reports of mental distress caused by the program.

Asher Wolf, one of the original campaigners, called the settlement a “letdown”.

“It’s a tiny amount of money for what people had been through,” she told TND.

Ms Wolf said she was upset that the case did not go through court, and that the settlement includes no admission of error from the government.

Centrelink has suspended its Robodebt program. Photo: AAP

The Not My Debt campaign commended the class action for achieving a settlement. However, organisers said they had hoped for a legal judgment on the system, and called for a Royal Commission.

“No one has been held accountable,” campaigners complained in a statement, saying there were still “fundamental flaws” in the system.

“Our hearts go out to the Robodebt victims who hoped for more from the class action process, and to all of the hundreds of thousands of Australians who have been and continue to be caught up in this cruel and illegal scheme.”

The Australian Unemployed Workers Union called the settlement “an insult”.

“No amount of money can adequately compensate the families of those who took their lives,” the AUWU said.

Ms Wolf said the case was a sign that community justice centres like Victorian Legal Aid needed better funding.