Around 470,000 Australians will receive a refund after having incorrect debts levied against them, with payments to start flowing this week.
The Federal Government in late May revealed that $721 million in refunds would be delivered to Australians, after it was found the robodebt income compliance program had incorrectly pursued 470,000 debts.
The Australian Tax Office has clarified that the refunds are not taxable income and as such those who receive it do not need to include the sum in their tax return.
Similarly, they do not have to submit an amendment for a prior return.
How will I receive the refund?
Services Australia said the refunds started flowing on 27 July and should have landed in all accounts by the end of November.
For Australians who hadn’t begun paying down the debt, that debt will be reduced to zero.
People who have paid the debt will receive a refund, including recovery fees and interest charges.
Those who are currently receiving payments from Centrelink will have received a letter between Monday 13 July and Friday 24 July informing them that they will receive a refund, although some people will receive the letter later.
This group doesn't need to do anything to receive the refund, it will simply show up in their Centrelink online account. Then, they will receive a letter confirming the refund.
Those who aren’t regularly receiving a payment from Centrelink will need to update their details.
Services Australia said this can be done from 27 July using their Centrelink online account through myGov. Once they’ve logged on, they should see a ‘refund pending’ task requiring confirmation of details.
Once the details are confirmed, the payment should flow within five days.
Will the refund affect JobSeeker or other income support?
Refunds are not assessed as income, so will not impact other welfare payments.
However, Services Australia said Australians whose assets change due to the payment then they will need to get in touch, as that may change their current payment rate.