Centrelink's coronavirus debt recovery pause set to end

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Centrelink’s debt recovery program will recommence next month following a pause as part of the federal government’s coronavirus response.

The pause was implemented on 3 April 2020 to help ease budget pressure on welfare recipients.

“Early next month, we’ll start contacting people who have a debt to let them know the due date for their repayments and how to start repaying money,” Services Australia said in a statement.

“We’ll provide information to help people understand the reason for their overpayment and set up the best repayment options for their situation.”

The debt pause for Victorians ceased on 11 January, but repayments won’t be mandatory until February.

“As debt activity starts again, Services Australia will work with people to make the process as clear and simple as possible,” said government services minister Stuart Robert. “The agency will explain how debts arose, where to go for more information, how to self-service and offer other support.”

Centrelink’s debt recovery program became infamous when an automated system that started in 2015 accused at least 370,000 Australians of owing money to the government. This became known as ‘robo-debt’.

“The robo-debt scheme automatically issued notices to welfare recipients identified as having debts through a process of income averaging,” the ABC reported.

“This compares a person’s reported income with their income as measured by the Australian Tax Office.”

In November 2019, the Federal Court found that it was unlawful to use income averaging to issue debts and in November 2020 the law firm representing the victims announced they had struck a $1.2 billion compensation deal with the Commonwealth.

The $1.2 billion is made up of:

  • $721 million the government had already agreed to pay to more than 370,000 people who were wrongly pursued
  • $112 million in compensation
  • a decision to drop a further $398 million in debts wrongly raised.

“The money covers repayment of the debts illegally raised by the government, interest on the money paid by victims, and legal fees.”

Despite the controversy, Services Australia has continued to contract private debt collectors. The Guardian reports that these companies will face penalties if they don’t claw back enough money.

“Tender documents show the three collection agencies who win three-year contracts to pursue individuals over Centrelink debts will be subjected to ‘specific performance targets’, including the performance of other collection agencies.

“One criticism of the program was that welfare recipients were harassed by private collection agencies over debts, including many which turned out to be unlawful.”

Kristin O’Connell, a spokesperson for the Australian Unemployed Workers’ Union, said there was no reason for Services Australia to outsource debt collection.

“We know that through [the] robo-debt program people were having horrific experiences,” she said.

“They weren’t being told all the information and they were being lied to as well.”

Ms O’Connell said the union was appalled that the government had not learnt from the robo-debt scandal.

The scrapped robo-debt program focused on undeclared employment income.

“But the agency still recoups billions from other debts related to family tax benefit, childcare subsidy, and across all payments for people accused of not declaring assets or other changes to their circumstances.”

Here’s what Services Australia says about the recommencement of debt recovery:

There are four things to know:

  • you don’t need to pay anything back until February, but you can if you want to
  • if you don’t understand why you’ve been overpaid you can talk to Services Australia. Call them on your regular Centrelink payment line and ask them to explain. If you disagree with the decision, you can ask for a review
  • when you need to start repaying the money there will be options. You’ll be able to work with Services Australia to find the best one for you
  • if you’re worried about this, Services Australia can give you support. It has social workers who can provide short-term counselling, information, and referrals to other services.

Did you fall foul of the robo-debt scheme? Are you confident this version will tick all the boxes?

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Written by Will Brodie


Total Comments: 13
  1. 4

    Maybe there should be some time spent on recouping tax dodges by multi national companies. It would be a lot more fruitful than chasing up welfare recipients.

    • 1

      I agree. This mob should be chasing the BIG fellas for their money not the meek, down and out Australians who put them into power. We would most likely back in the Black if these BIG Boys paid their way.

    • 1

      Spot on Inextrtime

    • 1

      You’ve got that spot on inextratime…multi national companies get away with tax dodging and this government go on about being a low taxing government….well when you have these companies virtually paying no tax that explains some of this low taxing…..but when it comes to over payment of Welfare lets get bully debit collectors onto it.

  2. 1

    THE goverment seems to like picking on the small fry who are struggling to make ends meet while the big corporations are rubbing there hands together making more money than ever before let us poor people have enough money to survive on we have all payed tax thru the years and now you are making it even harder NOT FAIR

    • 1

      It’s because they’re bullies Brian,they love kicking the underdog.

    • 1

      I’m still amazed that Sturt Robert is the minister for government services after what happened with this Robo Debt failure….and here he is announcing that debit recovery will start again you just wonder how long it will take for yet another stuff up.

  3. 1

    The one thing that you can guarantee from the current LNP government is consistency – TO BE CONSISTENTLY WRONG in the way that they treat the people who elected them to be a fair government. I bet that there will be another robo-debt scandal, probably for different reasons, in the near future as the private debt collection agencies resort to coercion and intimidation to recover money, no matter what!

  4. 1

    I was one of the Robo debtors and included in a class action, in which we were refunded all my payments. Does anyone know if we all be be required to start payments again…? I don’t think I could handle the stress and anxiety it caused.

  5. 1

    It would be nice for pollies to explain there expense’s and then go from there

  6. 1

    Perhaps CentreLink could pay all the overpaid debts…it was their mistake after all.

  7. 0

    Wrong platform to to pushing your spam.



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