Government to contact potential robodebt recipients over class action

The government faces the prospect of paying back hundreds of millions of dollars to current and former Centrelink recipients over debts raised by averaging annual income data given to the tax office instead of using variable fortnightly earnings reported to the welfare agency.

The debt-raising program, officially called online compliance intervention, but widely referred to as "robodebt" began in 2016 and was paused last year after the government received legal advice that the debts raised were unlawful.

Gordon Legal launched a class action of behalf of those who had received the debt notices, with more than 12,000 people registering their interest in the case.

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While the Federal Court has ordered the Commonwealth to contact all potential members of the group affected by May 25, Government Services Minister Stuart Robert's office again declined to confirm how many people had been identified by the government on Sunday, citing the legal proceedings.

Under Australian law it is standard for potential members of a class action to be included unless they choose to opt out.

The government and Gordon Legal are set to enter mediation next month before potential court dates between July and September.

"The robodebt class action is on track for mediation in June, which we hope will resolve the class action," said James Naughton, the Gordon Legal lawyer leading the case.

"Centrelink will be notifying people who it believes are group members over the coming days. If people have received a notice then that means that Centrelink believes that person has been affected by robodebt and they are a group member in the class action."

Mr Naughton said he recommended people don't opt out, and if they want more information to read the opt-out notice from the court or look at the Gordon Legal website.

More than 600,000 debts have been issued under the program, but it isn't clear if all of them will need to be paid back by the government.

It has been reported the government has received advice more than 440,000 people will need to be paid back at a cost of $550 million, but this hasn't been confirmed.

The government has already lost a case against a debt raised through averaging in a test case brought by Victoria Legal Aid in 2019, where the Federal Court found it was "irrational" for Centrelink to use averaged income data from the tax office to raise a debt instead of using the previously reported income data given straight to the agency.