Background
In Prygodicz & Others v Commonwealth of Australia (No 2), the applicants brought a class action on behalf of more than 400,000 people seeking redress for unlawful “Robodebt” recoveries based on automated income-averaging. The Federal Court approved a settlement in which the Commonwealth admitted the debts were unlawfully raised and agreed to refund repayments and pay compensation.
AI interaction
This was 'a shameful chapter in the administration of the Commonwealth social security system and a massive failure of public administration.’ The Court’s description underscored the systemic dangers of unverified automated decision-making and reinforced the principle that algorithmic efficiency cannot override statutory safeguards, due process, and proportionality in public administration.
Note: Together with Amato v Commonwealth, this case established that automated income-averaging without human verification was unlawful under Australian social-security law, leading to the repayment of over AUD 1.7 billion and reforms in digital decision systems across government.