Centrelink to increase penalties for welfare debt
Around 170,000 Australians sharing in $900 million in welfare debt will be charged 8.77 per cent interest if they don't begin repayments in the next month.
The Government has never before charged interest on welfare debts.
"Some of these debts go back up to 15 years," Human Services Minister Michael Keenan said.
"But moving forward, it's very important that if you earn money, and you're not doing anything about repaying that money when you have the capacity to repay, then your debt is going to accrue interest and continue to increase."
Mr Keenan said the Federal Government has been too lenient in the past.
"People just haven't made any effort to repay it, and the Commonwealth has continued to engage with people, reminding them to repay it," said Mr Keenan.
"There's all sorts of ways that we can escalate that, including sending our debt collectors.
"Just because we're chasing you for the debt, doesn't preclude us from taking other actions such as police action."
How do you feel about this?
Having worked in the Centrelink debt system, there are just a few problems with this idea that are an issue. First there are the wrongful debts. This includes those raised years later, where people can no longer raise payslips and are being raised due to comparison to tax records which don't compare as accurately as the data most people and companies don't keep. There are also those where Centrelink are notified but dont act. People in general are so confused by the system, they trust Centrelink.
Then thete are the poor who change addresses many times. Because they can only afford cheap accommodation which is churned over about every six months, they may have moved twice by the time the debt is raised. Should they be penalised for not being able to afford better accommodation?
Also debts are forwarded to debt collector after 10 days. Given that Australia Post cannot guarantee delivery to regional areas in that time frame let alone allow time for people to research or obtain records, is this fait?
And yet the rich who owe millions can negotiate a discount on their tax or ASIC fines repayments as they can afford the lawyers. Where is the justice?