Class Action Against Centrelink Robo-Debt Launched

A class action is being launched against Centrelink's controversial robo-debt welfare recovery scheme.

Melbourne law firm Gordon Legal will argue the commonwealth must repay debts collected and provide compensation to people affected by the scheme.

Senior partner Peter Gordon, appearing alongside Labor frontbencher Bill Shorten in Canberra on Tuesday, said he believed the scheme amounted to unjust enrichment in the eyes of the law.

He said the robo-debt algorithm, which calculates the alleged debt owed by welfare recipients from overpayments, was "inadequate" and "simplistic".

Shadow Minister for Government Services Bill Shorten and and Gordon Legal Senior Partner Peter Gordon at a press conference on Tuesday. Photo: AAP.

Shorten dubbed the suit a "David and Goliath" struggle against a "pig-headed" government.

"Think of Big Tobacco in the United States. Think of asbestos. And now robo-debt," Shorten said.

READ MORE: Ombudsman To Investigate Robo-Debt Scandal

He said in the past couple of months, people's legal challenges against their robo-debt had been settled by the government so it could avoid proving the legal basis it was trying to reclaim debts on.

Photo: AAP.

"My own research in the last couple of months has led me to believe that it is almost certainly illegal," Shorten said.

Gordon said he expected the matter to go on trial in the next 18 to 24 months if the government didn't settle beforehand.

READ MORE: Calls To Suspend 'Crude' Centrelink Robo-Debt In Landmark Court Challenge