Centrelink resumes debt-chasing from Monday 1 February

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Centrelink changes set to take effect today will put hundreds of thousands Australians on notice, as the pandemic debt reprieve ends.

Around 1.3 million debts were paused in April last year to help households get through the economic lull caused by COVID lockdowns. That pause ended on 11 January and repayments are set to begin over the next week or so.

“From the start of February, we’ll begin contacting people who owe money to let them know why they have been overpaid, the amount of the overpayment and their due date for repayments to commence,” said Services Australia chief Hank Jongen.

Debts totalling approximately $5 billion are currently owed, with the average frozen debt around $3485 and a major chunk of the total attributable to Family Tax Benefit payments.

According to Services Australia, these debts are not related to the 400,000 or so raised by its failed robo-debt scheme.

“What we are talking about here are legitimate debts,” Mr Jongen told 9News.

“Let’s not lose sight of the fact this is taxpayers’ money.”

Services Australia seems conscious of its checkered past in relation to debt recovery.

In November last year, the federal government agreed to pay $112 million in compensation to around 430,000 individuals in a robo-debt class action settled in the Federal Court.

That settlement brought the total remuneration from the failed debt-collection scheme to $1.2 billion.

The robo-debt scheme had also been heavily criticised since its inception, with multiple examples of incorrect debt notices and bullying vulnerable Australians.

The department had also been accused of using strong arm tactics in the form of threats to charge daily compound interest, seize funds from bank accounts and garnishee wages.

That certainly doesn’t seem to be the case this time, with SA ostensibly handling debtors with kid gloves.

“If you find yourself in a difficult situation and you believe that you’re not going to be able to start repayments on the date we’ve nominated, don’t ignore the letter, don’t panic, just give us a call,” said Mr Jongen.

“We’re here to help and guide you through the process.”

Anyone who owes money is not required to pay back the full amount in one go and is instead being encouraged to implement a repayment plan.

“The earliest anyone will need to start repaying money is 28 February 2021,” he said.

“We want people to know they don’t need to repay their debt all at once – most people set up a payment arrangement and repay it over time.

“The easiest way to manage repayments is online – using their Centrelink online account through myGov or the Centrelink app.”

Services Australia is also urging recipients who may not have owed a debt prior to April 2020 to take heed of this information.

“We may have noticed you were overpaid in the past. Because we weren’t raising debts between April and October 2020, you may not know this. Now the pause is ending, we’ll write to you if you’ve been overpaid,” said Mr Jongen.

“Even though it may be stressful to hear you’ve been overpaid, we know it’s important for you to find this out. This helps you understand if you need to change how you manage your payment. For example, understanding how to report your income correctly or what changes to tell us about. It also helps you plan for the future.

“If you’ve been overpaid, we’re here to help you.”

Unpaid debts can attract interest charges above 7 per cent and involve debt collection agencies and, should Departure Prohibition Orders be issued, they can prevent people from leaving Australia.

Visit the Services Australia website for more information on debts and overpayments.

Do you owe Centrelink money? How has your experience been this time around? Do you have a question for Hank Jongen? Send it to [email protected] and will pass it on to him.

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Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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16 Comments

Total Comments: 16
  1. 6
    1

    Lets hope that Centrelink has actually learned its lesson on debt raising. Past behaviour suggests otherwise.

  2. 5
    1

    Well ….Buggsie you make a good point about the past behaviour with the Centrelink robo/debt….one change that hasn’t happened is the same Minister is still in his position,which i’m totally amazed with….it won’t take long to see if any change will happen.

  3. 2
    1

    Makes you wonder why the system is so complex that it allows so much over payment to happen. Maybe a National ID card would sort out a few things but of course that would encroach on personal liberties despite the massive amount of fraud and cost of fraud recovery that occurs.

    • 2
      0

      The system is complex because so many people try to beat the system. Overpayments happen when people forget to tell Centrelink that their circumstances have changed which may cause an overpayment. A national ID card won’t stop people forgetting to report changes.

  4. 8
    1

    I wished they had that much eagerness catching the multi nationals and religious organisations avoiding taxes than the struggling welfare recipients!

    • 2
      1

      well said Aussiefrog also add the ABN holders.

    • 1
      1

      Hear hear Aussiefrog.

    • 1
      3

      The so-called treasure said yesterday he’s quite happy for companies not to repay jobkeeper they claimed fraudulently

    • 0
      0

      Agree 100% and also Let’s not lose sight of the fact the pollies dont realise its taxpayers’ money when it comes to their own largesse in the form of allowance, salaries, perks, travel etc

    • 0
      0

      Every trading business big or small must have an ABN to trade so I’m at a loss to understand your comment. The ABN allows them to make legitimate and legal taxation claims against their income. Otherwise they are paying a dual tax of GST and then income tax on gross profit.

    • 0
      0

      Let’s hope the government treats struggling welfare recipients the same as other debtors.
      “Following payroll system bungles by Queensland government Health Minister Geoff Wilson said 22,000 Queensland Health workers who were overpaid by up to $200 will not have to give the money back.”

    • 0
      0

      The word “avoid” is the key, Aussiefrog. Claiming an expense paid by a business to enable them to conduct their business is a legitimate deduction and that is how to avoid tax. All businesses do it as well as wage earners who claim donations and work expenses to reduce their PAYE tax. Those businesses that “evade” tax are breaking the law.

  5. 4
    1

    Yes Aussiefrog but we are talking about the LNP here & their mates.
    Seventy-three millionaires paid no tax in 2017-18
    https://www.abc.
    et.au/news/2019-03-30/sixty-nine-millionaires-paid-zero-tax-in-2016-17/10954888

    One-third of large Australian companies paid no tax
    https://www.abc.
    et.au/news/2018-12-13/one-third-of-australian-companies-paid-no-tax-ato/10614916?nw=0

    I suspect far more billions can & should be retrieved from these parasites. Australia would be in a far far better position to reduce the gap between rich & poor & also in a great position to greatly reduce poverty.
    Centrelink is to complicated, that is why some people have been overpaid & fair enough if you’ve been genuinely overpaid then it must be paid back but with compassion & empathy & by government officers not a robot or contract debt collectors. Same goes for underpayment as well.
    A Universal Pension will go a long way in reducing the complexity of Centrelink & over payments in this area will no longer be a problem, as well as rorts as they should be able to be detected with plenty of cross checking etc.
    A fairer system for all will lead to a fairer Australia & also should see Australia pushing New Zealand as the least corrupt country in the world.

  6. 5
    0

    No porthboy, the treasurer didn’t say he’s quite happy for companies not to repay JobKeeper they claimed fraudulently. In response to a question about companies voluntarily refunding JobKeeper, he said that the legislation, supported by the Opposition, didn’t allow for return of funds legally granted. If you had been reading the news you would be aware that those people claiming JobSeeker illegally have been prosecuted.


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