The Federal Government has reached a $1.2 billion settlement over the controversial Robodebt scheme.

The Commonwealth has settled a class action lawsuit with more than 400,000 people who were wrongly sent computer-generated notices, asking them to pay a debt they didn’t owe.

It has agreed to re-pay more than $700 million in debt incorrectly collected and drop existing debt claims.

An extra $112 million will also be spent compensating victims who were part of the class action.

The class action was launched by law firm Gordon Legal and Partner James Naughton told Oliver Peterson compensation will depend on class action members’ individual circumstances.

“People who were out of their money for longer or had a higher debt compared to others will be compensated more.

“This will make sure there is equality among group members as a whole.”

Mr Naughton said there has been sense of relief and a sense of justice.

“The people that we represent have been very brave in standing up to the government in this class action.

“There’s a sense of justice in not only getting compensation for themselves but also for hundreds of thousands of other people.”

Group members do not need to do anything further and they will be contacted by Gordon Legal.

Listen to the full interview: