Government rethink on debt collection to protect vulnerable Australians

The federal government will no longer use external debt collectors to chase social security debts and says it hopes the move will “ensure robo-debt never happens again”.

Social services and National Disability Insurance Scheme (NDIS) minister Bill Shorten says the move will help to protect very vulnerable Australians.

“We have to look at the reality of who is affected – it’s often very vulnerable Australians, people who have gotten on government payments in the first place because they are at a vulnerable time in their lives,” he says.

“We have to stop giving their information to private companies and ensure the debt recovery process is lawful, fair and transparent.”

Mr Shorten says Services Australia will not renew its contract with external agencies ARL Collect Pty Ltd, Milton Graham/Recoveries Corporation Pty Ltd and Probe Operations Pty Ltd when they expire on 30 June.

After that date, all welfare-based debt collection will be handled in-house. Mr Shorten says raising debts on welfare recipients needs to be lawful, customer focused and handled with care and respect.

He also noted a change in how the government will approach welfare debts overall compared to predecessors.

“The power to raise lawful debts against citizens needs to be exercised judiciously and at every stage afford citizens the right of reply and not reverse the onus of proof from the government to the individual,” Mr Shorten says.

“Government should never start from the position that the existence of an alleged debt means the citizen is guilty until proven innocent.”

The announcement comes after tech website iTnews reported that Services Australia was using telecommunications metadata and password-cracking software to check on welfare recipients who were claiming payments for singles when there was reason to believe they were in a relationship.

A Services Australia spokesperson denied the claims, telling Gizmodo Australia in a statement that “telecommunications metadata is only used to support potential criminal cases” and that all debt collection initiated by the new government was lawful.

“It is not used in our compliance activities, which aim to prevent avoidable debt as a result of customers being overpaid due to changes of their circumstances,” the spokesperson said.

“We conduct our fraud investigations in accordance with commonwealth law, with briefs of evidence prepared for consideration by the Commonwealth Director of Public Prosecutions where there is sufficient evidence of an offence.”

Have you ever received an automated debt notice from the government? How did you handle that? Let us know in the comments section below.

Also read: Is Centrelink ‘hacking’ recipients’ accounts to investigate welfare fraud?

Brad Lockyer
Brad Lockyer
Brad has deep knowledge of retirement income, including Age Pension and other government entitlements, as well as health, money and lifestyle issues facing older Australians. Keen interests in current affairs, politics, sport and entertainment. Digital media professional with more than 10 years experience in the industry.


  1. Yep – they were chasing us for $56 overpayment of Rent Assistance.

    I asked for a review – no response.
    I asked for a review – 3 months later when I got another letter – no response.
    I lodged a complaint – no response.
    I tried to ring Centrelink to follow up – but the AI call system told me that because I owed money – I wouldn’t be put through to a call centre.
    I lodged another complaint.

    After 6 months – I received a message to say that the debt had been dropped.

    As we live in our caravan, we can claim rent assistance. BUT – you need to use the “Rent Declaration” Form – SU336m. It took four years for Centrelink to tell us that we were using the wrong form.

    Because we house sit, stay at low cost, free camps and showgrounds, we don’t always claim rent assistance. So when we make a claim – e.g. $240 a week in a caravan park, upload the documents, and receipt., it could be two “fortnights” before we get paid rent assistance.

    BUT – if we have stayed at caravan parks for 6 weeks, we never know 1. WHEN we are paid for 2. What amount we could be paid or 3. IF Centrelink is paying the right refund or 4. IF they are overpaying or underpaying us – and for which payment period was the payments halted!

    Centrelink DOES NOT HAVE A SYSTEM of receipts, of payment schedules, or even tell us that we have been paid for all the weeks of claims.


  2. More Centrelink lies. They just renamed Robo-Debt and their new collection process is as bad as any approach they have tried in the past.

    Last year, they said as I was born overseas, I had to claim a foreign pension. Because I’ve lived here most of my life, it wasn’t much and as it was difficult to do, they would do it all on my behalf. I said I didn’t want to, but CL said I had to. It was government legislation.

    They then made me search for records of when I arrived and how much time I spent overseas and applied for a foreign pension on my behalf. Immediately it was granted, CL reduced my Australian AP by an amount greater than what I was being paid from overseas. They claim that I wasn’t getting less, but when you convert the money, I was.

    For some reason CL couldn’t explain, they also reduced my wife’s Australian AP. She was born here and never lived anywhere else. She does not get a foreign pension. We understood she was only entitled to a couple’s pension.

    We argued her pension should not be reduced, but CL hid behind international agreements and legislation. They set up my payments and after 14 payments, claimed out of the blue last month that they had overpaid me, $612.71 between 11 April 2022 and 21 June 2022, due to my foreign payment having included arrears payments (from a previous Tax year!).

    They advised CL have taken the arrears payments into account and decided our Australian pension payments were overpaid by $612.71 between 11 April and June 2022. They recovered the overpayment from some foreign embargoed arrears, (which we never got), so I have no outstanding debt owing to Centrelink. My AP went down as a result $8.81 a fortnight.

    But then, they sent my wife a letter saying she had also been overpaid $612.71 and gave her 14 days to repay the overpayment or they would start recovery to claim back the over-payment. They also said if the debt was not repaid by the date they arbitrarily set, my wife may be charged interest. Based on their current behavior, we read this as will be charged interest!

    We tried to call Centrelink several times before the deadline on the letter, sitting on the phone for hours. We even tried for a call-back. When we finally got through (just before the deadline), the CL person was unable to explain where or when we were overpaid or when we got paid the mysterious arrears.

    We challenged this and asked for a review and explanation. After speaking to the CL agent, they set up a request for a review and said ignore the letter until we heard from CL again.

    Now without any reply to either the CL call, or the complaint I logged because I heard nothing in the 14-days they said it would take to get back, they have arbitrarily taken 20% off my wife’s AP so it looks like they plan to recover it over four maybe five payments. How heavy handed can you get? Seems Robo-Debt collection was a junior.

    Today, with no explanation, we received a letter from CL saying my wife’s AP has been reduced by 20%. For CL to just take 20% of my wife’s current pension payment and the same from future payments, they have acted as a very heavy-handed entity, doing what they claim they are not doing: Robo-Debt under a new guise!

    Taking action without any explanation and because they have supposedly overpaid my pension, via an ‘arrears-payment’, which I have no record of ever receiving is disgusting behavior and contradicts everything CL claims!

    What’s more they still can’t explain how or when this payment was made to me, but clearly know where these embargoed funds are as they were able to recover my supposed overpayment from them (but not my wife’s supposed overpayment).

    CL claims they deserve respect, but doesn’t show we older Australians the same respect, especially when they have been unable to explain, where these funds are, that we have not seen, but they clearly had access to!

    What next? Does CL just decide we made $1000 when we got back our deposit for a new car (which we cancelled) and claim another overpayment of our AP? The whole process stinks. CL are a law unto themselves and out of control!

    If CL had responded to either the request for an explanation or for detail before taking this money off us, we would have understood. But to just take it and not explain to either if us warrants further escalation.

    I filed a complaint saying the above and have heard nothing. Even if there was an overpayment which we doubt, it was because CL had made an error in their calculations.

    To now take over $612.71 in one hit from me and over 4 payments from my wife in these times when costs are soaring, and the AP increases have not kept up is highway robbery by a government department and shows no respect to us as people.

    If a business had made such a mistake, they would have explained it and written off the overpayment. If it was $1,225 (which they still can’t explain when or how), in the greater scheme of things for CL, this is peanuts. To us these repayments of four or so repayments of 20% each fortnight are significant.

    After CL collected the overpayment from my embargoed funds (where-ever and what-ever they are) they adjusted my AP. I now get $8.81 a month less than I was getting when I was overpaid. How this could have become a debt of $612.71 in 3 months is beyond any realistic belief.

    And how my foreign pension has any effect on my Australian wife’s AP other than the fact we get a married couple pension is also beyond belief. CL is an out-of-control monster, doing what it damn well likes and to hell with the respect owed to Australians.

    Failing to respond before cutting pensions is unacceptable behavior for the Minister, the Head of the Dept or the Department. Just sending a letter advising CL is automatically deducting 20% of my wife’s AP each month is Robo-Debt alive and well.

    This is racial discrimination because my wife married a foreigner! It is also racial discrimination because I was not born here, even though I am an Australian citizen. Maybe CL would prefer we divorce so they can pay two separate single aged pensions.

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