A class action will be launched against the Government over the so-called robodebt scandal, arguing the Government's automated debt system is unlawful.

Key points: Lawyers will argue the Government could not rely on the robodebt algorithm to collect money

Lawyers will argue the Government could not rely on the robodebt algorithm to collect money The action will seek both repayment of falsely claimed debts and compensation for affected people, lawyers say

The action will seek both repayment of falsely claimed debts and compensation for affected people, lawyers say The Opposition says the robodebt billing practices are "verging on extortion"

Opposition government services spokesman Bill Shorten announced the action, which will be brought by Gordon Legal, and comes after sustained pressure on the Government over the system.

Peter Gordon, a senior partner at the law firm, said the collection of money based solely on a computer algorithm was unlawful.

"The Commonwealth has used a single, inadequate piece of data — the robodebt algorithm — and used it to seize money and penalise hundreds of thousands of people," he said

"We'll allege that to simply collect money from hundreds of thousands of people by the simplistic application of an imperfect computer algorithm is wrong.

"We think that before the Government docked the pensions or took the tax refunds of widows and carers and aged pensioners it needed to have better evidence, it needed to consider each case individually."

Mr Gordon said up to 160,000 errors could be blamed on robodebt, and the legal action would seek both repayment of falsely claimed debts and compensation for affected people.

He said the system had unlawfully taken tens of millions of dollars from Australians, and he was "comfortably satisfied" the suit met the requirements of a class action.

"Not every case needs to be exactly the same. They only have to be roughly similar," he said.

'There's no case, there's no papers, there's no plaintiffs', Minister says

Government Services Minister Stuart Robert accused Mr Shorten of pulling a political stunt by announcing Labor's backing of the class action an hour before Question Time.

He criticised the suit's backers for announcing it without having filed papers, or putting forward prospective plaintiffs.

"There is no court case, there's no case, there's no papers, there's no [plaintiffs]," Mr Robert said.

"I'm simply saying that if you were going to launch a class action before Question Time, and you were serious about it, do you think you'd ask a single question about it in Question Time? Just one?"

Stuart Robert backed the debt recovery system. ( ABC News: Tamara Penniket )

Mr Robert said he had faith in the debt recovery system, and said while 20 per cent of letters issued were later shown to be chasing debt that was not owed, it demonstrated the system was working.

"Australians are required to report their income to Centrelink. That income, or what they report, is then matched against what they [are] reporting on their tax return to the ATO, and if there is a discrepancy, Australians are asked to explain that discrepancy," he said.

"In 20 per cent of those cases, that discrepancy is adequately explained."

Mr Shorten said he believed the robodebt billing practices were "verging on extortion".

He said the fact the Government regularly settled claims meant the legality of the system was not tested in courts.

"This Government has been quietly settling the claims and not proving the legal basis upon which these robodebt letters are sent out to people," he said.