Tasmanians were almost doubly over-represented in the "robo-debt" income data matching scheme which targeted Australians receiving government payments, with those affected to receive about $280 each in compensation from a class action settlement.
Figures from Gordon Legal - which ran the class action against the Commonwealth over the scheme - show about 15,000 Tasmanians received robo-debt notices out of a total of 400,000 Australians, representing approximately 3.75 per cent.
Tasmania has 2 per cent of Australia's population.
On Monday, a $1.2 billion settlement was reached with the Commonwealth in which $112 million will be paid in compensation to the 400,000 affected individuals - $280 each. The Commonwealth will repay $720 million in debts collected invalidly and will drop $398 million in claims.
A spokesperson for Gordon Legal said individuals did not need to be registered with the class action to receive compensation or a refund, if applicable.
"If they've received that opt-out notice and they qualify, they're already part of it," she said.
"They should receive letters in four-to-six weeks with more information. Those letters will come from Services Australia."
Robo-debt involved Centrelink using averaged Australian Taxation Office PAYG income data during periods when individuals received government payments, and treated those amounts as actual earnings. Gordon Legal stated this meant the system "often ignored what the person actually earned at the relevant time", and the averaged ATO amounts would not reflect how much a person actually earned.
Next step: calls for a royal commission
Following the settlement, Labor and the Greens have called for a royal commission into robo-debt to determine how the scheme was allowed to operate despite receiving advice that it was harmful and potentially unlawful.
The data matching scheme was initially established under a federal Labor government, but was automated by the coalition in 2016.
The settlement meant the government could avoid stating it was legally liable for those affected.
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Tasmanian Labor senator Helen Polley said it was alarming for vulnerable Australians to receive these letters from the government.
"I've known people who received these debts and have just paid because they felt that the government would know better than them, and they wouldn't have the resources to investigate or keep enough documentation. It has caused real damage to people's mental health," she said.
"No one disagrees that if there's an over-paymnet, then the government needs to ensure it gets paid back. But the inhumane way the government did this is unforgivable.
"Everyone believes that this was a system that failed, that failed Australians generally, particularly when it comes to so many Tasmanians."
Senator Polley said Labor would return to the data matching system that involved Human Services staff carrying out the process, rather than automation.
Bass Liberal MHR Bridget Archer said her office was available to assist in any Centrelink issues, including those who believe they are eligible for a refund or have questions about a compliance review.
Settlement amount 'a travesty': unemployed union
The Australian Unemployed Workers' Union described the settlement amount of $280 per person as "a travesty" in comparison with the human impact.
Spokesperson Kristin O'Connell said the purpose of the class action was to hold to government to account and to provide "genuine" compensation for those affected, but it appeared to achieve neither.
"It is a joke to suggest that $280 even begins to compensate people for the trauma that they experienced trying to live on a welfare payment, trying to survive on half the poverty line, and being forced to have some of that income taken away from them to pay a debt that was never owed, that was illegally raised," she said.
"This settlement may be the biggest in history, but that just reflects the enormous scale of the problem. Any class action with 400,000 people involved would be largest ever, it is no way means this is a good outcome though.
"The fact that Tasmania is so over-represented reflects the long history of governments ignoring Tasmania's unemployed."
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