A family member of a Tasmanian man who was hit with a $4000 robo-debt with little explanation says the class action settlement in the matter would not go far in compensating for the "hardship and anguish" suffered by victims.
The Federal Court approved the $1.8 billion settlement last week, which makes the government's agreement to repay $750 million to 381,000 people, and to wipe all debts, legally binding.
It added $112 million in interest to share between 394,000 victims, while 200,000 people from the class action would not receive benefit from the settlement as their debts had been substantiated.
The government did not admit liability as part of the process.
Those who objected to the settlement have the power to opt-out and pursue their own claims.
The interest amount comes to about $280-per-person, which has attracted criticism from welfare advocates.
Linda Hannah, of Greens Beach, whose son-in-law experienced severe mental health issues when he received a robo-debt notice - with the amount changing several times - said it was difficult to put a dollar amount on the pain that was caused.
"He just gave up with them, and has been paying it back for years. He just said, 'if you're saying I owe it, then I must owe it'," she said.
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"How do you put a monetary figure on the anguish caused by this? It doesn't in any way compensate for the hardship and anguish that it caused."
His debt was raised as a result of work as a relief teacher when his income varied widely week to week - a situation faced by many robo-debt victims.
In approving the settlement, Justice Bernard Murphy described the robo-debt scheme as a "shameful chapter" in the Commonwealth's social security system as "a massive failure of public administration".
Figures from Gordon Legal - which ran the class action - showed about 15,000 Tasmanians were victims of the scheme, representing 3.75 per cent of the total. Tasmania has about 2 per cent of Australia's population.