Queensland couple Gabe and Tessa Garland were hit with a debt notice from Centrelink in July for the only two JobSeeker payments Gabe received in 2020.
“You have been overpaid,” the letter states. “We have checked your Coronavirus Supplement and found we have paid you too much.”
“I felt like the earth gave way when I received the first letter in my inbox,” Tessa told Yahoo Finance.
In a series of phone calls, Tessa spent hour after painstaking hour with Centrelink staff providing documented proof that her husband Gabe had never misreported his hours or rate of pay.
Not only did Centrelink confirm that the information provided was all accurate, but Tessa was told the debt had been raised due to a Centrelink systems error.
The staff member said they would put the debt on pause for three months, but the representative over the phone didn’t have the authority to actually wipe the debt.
There was nothing Tessa and her family could do but wait for a call from Centrelink’s debt recovery department.
But in August, Tessa received yet another letter about the same debt.
“This issue is so distressing because I can and have proved beyond a shadow of a doubt that we do not owe this debt. All it takes is for someone to manually calculate this, and this problem would be solved,” she said.
Tessa is worried she will be dealt another debt notice, despite providing extensive documentation and spending several hours on the phone proving they had done no wrong.
“I just don’t understand how Centrelink has the right to demand a debt from my family without proof and without an explanation included in the debt notification. Saying, ‘You were not entitled to this payment,’ is not proof nor is it an explanation,” she said.
She felt she was being “treated like a criminal” by Centrelink and its representatives who she described as “apathetic” and trying to palm her off to different departments.
Tess and Gabe are far from alone.
Centrelink is facing the ire of a growing group of frustrated Australians who have been forced to take their stories to the media.
For many Australians, like Tess and Gabe, the debt has been raised without any justification and often through no fault of their own.
David* told Yahoo Finance he had accumulated a $1,500 Centrelink debt due to his own misunderstanding that led to a calculation error.
He called Centrelink to say he wanted to pay it off immediately – but was told he wasn’t allowed to, until Centrelink served him with a formal debt notice. That was back in January, and he’s since been waiting for a debt letter that never came.
David had also been receiving his pension as part of a couple.
After his wife passed away three weeks ago, he got in touch with his local Centrelink office to recalculate his pension now that he was considered ‘single’.
But because of his debt, which he wanted to clear but couldn’t, he wasn’t able to do so.
“It transpired that when a Centrelink customer has an outstanding debt, the Centrelink system does not permit any re-calculation,” he told Yahoo Finance.
“[Centrelink] Debt Recovery doesn’t seem to want to follow up the debt, which in turn prevents my local office from sorting out my ongoing pension.”
The experience left David feeling “depressed” and “frustrated” as he tried to sort out his Centrelink issues while trying to move on from his wife’s death.
David has since received a call from Centrelink Debt Recovery. His debt has now been sorted and his pension recalculated.
But David knows many others, like him, are struggling to navigate Centrelink’s confusing system.
“Goodness knows though how many Centrelink customers, unlike me, just give up.”
Complex Centrelink system leaves Aussies ‘frustrated’, ‘seething’
Centrelink is currently chasing more than 11,000 welfare recipients over a combined $32.8 million after a review found these recipients were reportedly overpaid.
Regional Queensland woman, Deborah Tidbury, told the ABC she is being pursued by Centrelink after receiving both JobKeeper and JobSeeker.
At the time, Tidbury realised she had been paid an extra week of JobSeeker and jumped on the phone to report it immediately.
“They told me no, they'd have only given me a payment I was entitled to [and] if there was a debt, I'd receive a debt payment down the track,” Tidbury said.
But in February, Tidbury was sent a letter just like Tessa and Gabe’s that left her “absolutely seething”.
"It was just how it was worded. Like it was my fault. Like I was the one that made the mistake.”
In early July, a young Australian man revealed on TikTok that Centrelink was chasing him over a $3,000 debt despite the fact that he never provided any inaccurate information to the agency.
“It’s a welfare payment. You can’t just ask people to pay it back to you when you change your mind. What the hell?”
In a follow-up video, he added: “They still provided me with the payment, I didn’t falsify any information … But now they’re asking me to pay it back.”
Centrelink has long been criticised for having a heavy-handed, punitive approach to chasing debts. The controversial robodebt scheme was wrapped up in 2019 and deemed to be legally unlawful.
Around 380,000 Australians affected by the scheme, described as a "massive failure" by a Federal Court judge, will be paid a total of $1.2 billion.
But a report from the Commonwealth Ombudsman found that Services Australia actually kept chasing debts through the flawed income averaging method even after it was banned.
‘Legally required to recover money’: Services Australia
In a statement provided to Yahoo Finance, Services Australia General Manager Hank Jongen said the agency’s priority was to “ensure our customers get the right payment at the right amount”.
“We are legally required to recover money a customer isn’t entitled to if they’ve been overpaid,” he said.
“Reporting income is a requirement for all income support payments, and we communicate this to customers when they apply for and are granted payments.”
Jongen added that the agency “carefully balance[s]” obligations to claw debts with “sensitivity” to the individual’s circumstances.
“We know many people are still doing it tough and we’re sensitive to the challenging circumstances people face. We will work with anyone experiencing hardship who owes us money to come up with a solution that meets their needs.”
Centrelink debts and debt recovery has been paused for people living in locked-down LGAs.
How to dispute a Centrelink debt
Jongen invited individuals who have been served with a Centrelink debt but don’t understand why to call the agency and ask for an explanation.
“If they disagree with a decision we’ve made, they can ask for a review.”
Centrelink recipients can apply for a formal review by calling Centrelink, visiting a branch, or filling out this form.
And if you disagree with the decision of an authorised review officer from Centrelink, you can escalate it to the Administrative Appeals Tribunal (AAT). You have 13 weeks after receiving the authorised review officer’s decision to raise it with the AAT.
You can also make a complaint to Centrelink. But if you’re not happy with the result of that complaint, you can take it up with the Commonwealth Ombudsman.
This is what David attempted to do – but he was told it would be another several weeks before he would hear back.
“I … lodged a complaint with the Ombudsman but they have flagged a six-week wait before they get to my complaint,” he said.
*Names have been changed to maintain privacy.