The number of complainants taking part in a class action against Centrelink's robo-debt scheme has hit 4,000 as the writs for the action were filed, Shadow Minister for Government Services Bill Shorten said on Wednesday.
Announced in September, the action brought by Gordon Legal is seeking repayment of what is alleged to be "unlawfully claimed debts", as well as compensation for victims of the government scheme.
"This is a drastic but unfortunately necessary move for the victims of robo-debt -- Australians who have been hit with harsh, inaccurate and almost certainly illegal -- debt claims from the government," Shorten said.
"Labor has repeatedly called for the Liberals to scrap this scheme and address the shortcomings in it that saw innocent Australians have the robo-debt hounds sicced on them.
"But through disaster after disaster they have arrogantly refused to admit any issues, stonewalled, obfuscated and misled the public."
The former Labor leader said up until this week, the government has refused to budge.
"In the face of such recalcitrance the only avenue of recourse for victims acting in good faith is the courts," he said.
On Tuesday, the government announced it was pausing the automated parts of the debt recovery process
Minister for Government Services Stuart Robert, who previously justified robo-debt by saying the government has a lawful responsibility to claw back money from welfare recipients, said he asked his department to identify the "small" cohort of Australians who have a debt raised solely on the basis of income averaging to discussions on seeking "further points of proof" can begin.
Last week, Robert was still defending the project.
"Using averaging as the basis to say to a citizen, 'There may be a debt, can you please engage with us?' is entirely appropriate," Robert said on Thursday at the National Press Club.
"And that process of using averaging -- using ATO tax receipts or end of the year assessments -- to say to Australians, 'There may be a problem, please engage with us' is absolutely appropriate and we have responsibility to do that."
Gordon Legal said on Wednesday that it will be alleging that from July 2015, robo-debt caused "significant and unnecessary detrimental impact on thousands of lives".
"The stoppage of further robo-debt claims by Centrelink and the government is just the beginning of the battle," said Gordon Legal senior partner Peter Gordon.
"Our mission now is to ensure that Australians harmed by this predatory scheme are returned to their original position."
Questioned on the legal action at the National Press Club, Attorney-General Christian Porter said the government took legal advice relating to the class action and another litigation, but did not say explicitly the government had changed robo-debt due to the advice.
"You could imagine that any government, depending on where those matters are in the process of litigation, seeks advice on those individual matters, and that's fed in, obviously, to decision-making in the Department of Human Services and in the minister's office," he said.
"But again ... this is an issue that pertains to a group of people -- the number of which is unknown, but obviously that's the work that's being done -- who were sent a notice to respond to the Department of Human Services based on the data income matching to explain a discrepancy but who made no effort to engage and did not engage with the department."
On the issue of defamation and online platforms, Porter said during his speech on Wednesday that he believes social sites and media should be covered by the same law.
"My own view is that these online platforms should be held to essentially the same standards as other publishers but that how this should occur requires a sensible measured approach to reform taking into account the differences in the volume of material hosted between Twitter or Facebook and a traditional newspaper, for instance," he said.
"But what is clear is the playing field is not at all fair at the moment."