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Why Centrelink hit 11,771 Aussies with $32 million debt letters

·3-min read
Centrelink sign plus $100 notes
Thousands of Australians have been sent a letter from Centrelink advising that they received too much in government benefits. (Source: Getty)

Centrelink has sent debt letters to nearly 12,000 Australians on welfare payments ordering them to pay back debts worth a total of nearly $33 million.

The debt recovery comes after the agency deemed they were actually ineligible to receive the payments, or were overpaid.

Services Australia told Senate Estimates that it had raised debts with at least 11,771 people after a review into income payments, including JobKeeper payments.

“As at 30 April 2021, approximately $32.8 million in debt has been raised through completed reviews,” the agency said in Senate Estimates.

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In order to receive JobSeeker and other government payments, the recipient must accurately report their income to the agency. This information is then used to determine how much the individual can receive from Centrelink. The more the individual earns in income, the lower the government payment.

Inaccurate income reports meant some Aussies received payments they were not entitled to. Some had applied to receive both JobKeeper and JobSeeker at the same time, which was not permitted.

A Government Services spokesperson told Yahoo Finance that it was “the responsibility of individuals receiving social security payments to report their earnings accurately”.

“Taxpayers only pay recipients what they're eligible for – no more and no less,” the spokesperson said.

The agency is by law able to claw back funds if it is found that the individual was ‘overpaid’ through inaccurate or wrong information.

“Services Australia takes every opportunity to remind people of this obligation during the application and payment process,” the spokesperson said.

“When a person is overpaid, Services Australia will always write to them to let them know how much they were overpaid, and explain why they owe money.”

Employment Minister Stuart Robert said recipients needed to state they weren’t receiving both payments.

“When JobSeeker and JobKeeper were put into the Australian population, it was quite clear that Australians knew that you could not claim both,” Robert told Parliament.

Revelations about the Centrelink debt notices come as the Morrison Government knocked back a bill that would have made public the names of profitable businesses that received JobKeeper.

Centrelink under fire recently for wrongfully raising debts

The Commonwealth has been forced to pay back around $1.2 billion to 380,000 Australians affected by the robodebt scheme which was deemed by a Federal Court judge to be “a massive failure”.

Under the scheme, Centrelink recipients had their income information calculated through an automated income averaging system that then raised wrongful debts that led to “ financial hardship, anxiety and distress … and in some cases suicide”.

While the robodebt scheme wrapped up in 2019, a report from the Commonwealth Ombudsman released in April this year found that Services Australia actually continued to raise debts through this method even after it was deemed legally unlawful.

“We are concerned that Services Australia nevertheless continued to recover income averaged debts despite a high risk that many of those debts were ‘legally insufficient’,” the report said.

Instead of immediately pausing debt recovery on all debts, there was “a period of some months during which debt recovery action was continuing” that had been raised on “‘legally insufficient’ grounds”, the report found.

–with AAP

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