Centrelink will soon issue hundreds of thousands of notices for a class action against its ‘Robodebt’ scheme.

The Federal Government has admitted it unlawfully issued over 400,000 welfare debts the scandal-ridden “income compliance program”, otherwise known as Robodebts.

Law firm Gordon Legal has launched a class action seeking interest and compensation as well as the repayment of debts unlawfully claimed by the government.

The government has been ordered to identify all potential class action members and send out notices via MyGov or by post about the court challenge by 25 May.

More than 12,000 people have registered with the law firm, however, Australian law considers all members of a “class” are part of the action unless they “opt-out”.

Opposition government services spokesperson Bill Shorten has called on the government to “settle this case immediately, restore public confidence in Centrelink by allowing the court to be the independent umpire, and pay the victims back their money as well as interest”.

“This would allow the hundreds of Centrelink workers working on limiting the government’s robodebt exposure to be moved back to the frontlines of helping their fellow Australians with their social security needs in this time of national challenge,” he told Guardian Australia.

The government has successfully gained public interest immunity for questions about the Robodebt scheme in the Senate.

However, a leaked ministerial submission to cabinet suggests the government hopes to settle the case, and that Services Australia will “administer 449,500 refunds determined under the programme”, worth $555.6 million.