Labor has agreed to pay an additional $475 million to people affected by the unlawful debt collection scheme, which pursued welfare recipients for money they didn't owe.
It's the largest settlement in Australian legal history and, if approved by the federal court, will mean the bungled program has cost the government more than $2.4 billion.Â
The government will also pay tens of millions of dollars in legal and administrative costs.
Settling the claim was the "just and fair thing to do", Attorney-General Michelle Rowland said.
"The most significant cost of robodebt cannot be measured in dollars and cents. It can only be measured in human terms because the robodebt scheme destroyed lives," she told parliament on Thursday.
The latest settlement is on top of $1.76 billion in forgiven debts and $112 million in compensation from the original robodebt class action.
Gordon Legal lodged an appeal after the robodebt royal commission found the automated debt collection scheme was "crude and cruel" and "neither fair nor legal".
The law firm expects tens of thousands of people to register for a slice of the settlement, but is flagging it will likely take years to pay everyone who signs up.
Former government services minister Bill Shorten, who led the charge to establish the royal commission into the scheme, said the agreement "closes a dark and shameful chapter in Australian public administration".
"This settlement cannot bring back those lives lost, nor can it erase the years of stress suffered by so many. But it can serve as a line in the sand," he said.
Robodebt operated between 2015 and 2019 and used automated data from the tax office to calculate welfare recipients' average earnings and issued debt notices with little to no human oversight.
The royal commission found it contributed to at least three suicides.
The Greens have welcomed the settlement but say the political leaders and public servants responsible must still be held accountable for the scheme.
"People who were subject to robodebt, people who lost family members to robodebt, have still not seen justice," Greens senator Penny Allman-Payne said.
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