What can you do if you receive a Centrelink debt notice?

Have you received a surprise debt letter from Centrelink? Don’t panic, you’re not alone.

Almost 12,000 people have been issued with unexpected debt notices from Centrelink after lodging their tax returns for the 2020-21 financial year. The notices claim discrepancies between income reporting and the JobSeeker and JobKeeper payments, with more than $32 million claimed to be owed.

In addition, many parents have received debt notices claiming overpayments related to the childcare subsidy scheme, with one Sydney mum given just eight weeks to pay back more than $11,000.

In stark contrast is the government’s refusal to attempt to recover the millions paid to companies that went on to make a profit.

Read: Government chases down COVID overpayments, but not from business

“It is farcical that the government is chasing individuals for so-called debts for what will be genuine mistakes in a confusing system when they have given millions to billionaires,” Greens senator Rachel Siewart said in Senate estimates last week.

In response to the fierce backlash, the federal government says it has paused debt collection on individuals … for now.

“We completely understand that many people are still doing it tough,” social services minister Linda Reynolds says in a statement.

“It’s why we’ve paused debt raising and new debt-recovery activity in locked-down areas.”

Read: Centrelink threatens to withdraw pension of 102-year-old woman

So, what can you do if you have received one of these letters? First of all, don’t panic. You may not have to pay the money back straight away, and maybe not at all.

If you believe the debt has been raised in error, there are several ways to challenge the decision. The Centrelink website states you can call the number listed on your debt notice, or your regular income reporting line, or the Centrelink Debt Recovery line to add any new information for Centrelink to consider.

If Centrelink’s decision remains the same, you can request a review of the decision.

“You can contact us, tell us you want to dispute the debt. That will trigger a review process internally and, if you still believe we’ve made the incorrect decision, there’s an independent tribunal you can go to,” says Services Australia general manager Hank Jongen.

Read: Robo-debt now ‘terrorising pensioners’

If you feel you need legal help to appeal against a Centrelink decision, Legal Aid in each state may be able to help out and free Centrelink-specific legal advice is available through Economic Justice Australia. The decision can even be taken to the Administrative Appeals Tribunal (AAT).

If all avenues are exhausted and Centrelink still maintains you owe it a debt, you will have to pay. However, Services Australia is flexible in its payment plan options.

“The key is, talk to us, because what we don’t want to do is add to your overall financial burden and we can enter into flexible payment arrangements, in relation to those debts,” Mr Jongen says.

Have you received a debt notice from Centrelink? Do you intend to challenge the decision? Does it seem like big business is being treated differently? Let us know in the comments section below.

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Written by Brad Lockyer