Knox Class Action (Facilitation) Bill 2026; Second Reading

Opened the debate

Walsh argued that the bill addresses the legacy of the illegal Robodebt scheme, which caused harm to over 400,000 people and cost the Commonwealth more than $2 billion. Walsh stated that the government had agreed to all 56 Royal Commission recommendations, with 52 fully implemented. The bill facilitates the Knox settlement, approved by the Federal Court of Australia on 23 June 2026, which provides $475 million for approximately 168,000 class action members. Walsh explained that the legislation exempts these payments from taxation, income testing, and statutory recovery to prevent further distress to victims. Walsh emphasised that this is a unique exception due to the extraordinary circumstances of the scheme and does not set a broader precedent.

Government response

Walsh moved that the bill be read a second time and sought leave to incorporate the speech into Hansard. Walsh detailed the government's commitment to justice for Robodebt victims, citing the establishment of a Royal Commission and subsequent legislative reforms. Walsh outlined that the bill amends the National Disability Insurance Scheme Act 2013, Social Security Act 1991, and Veterans' Entitlements Act 1986 to protect settlement payments. Walsh noted that further exemptions, including from income tax, would be enacted by the close of the 2026-27 financial year. Walsh urged swift passage to ensure timely compensation and banish the toxic legacy of the scheme.