As it's a known fault they should be doing it under good will.
Have you serviced the vehicle through VW? This can help in situations like this although it's best to speak to your service advisor.
If no love there, call VW head office and raise your concerns and they may be able to influence the dealerships decision.
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For those interested / having the same issue - VW agreed to pay for the replacement part and half the installation labour (now over a year out of warranty) . Fully arranged by the Service Manager at Sydney City VW. Going in for the replacement early March.
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