Many welfare recipients had been overpaid, with the debts owed by welfare recipients “drastically increased”.
Rishworth said some debts had been sitting in the system for over three years so “some people aren’t even aware that they’ve received too much money from Services Australia”.
Labor has blamed poor management by the Coalition government and staff cuts at Services Australia for the inaccurate payments.
“While the former Government paused debt recovery and compliance activity due to COVID lockdowns and natural disasters, they should have been taking steps to make sure people were getting the right amount of money in the first place,” Rishworth said.
Minister for Government Services Bill Shorten said the Government had a responsibility to take steps to recover debts and “therefore efforts to recover existing debts will need to recommence”.
He also said it would be possible for people with debts owing to enter into payment arrangements with Services Australia.
The Antipoverty Centre has criticised the decision to restart debt recovery, calling on the Government to waive existing Centrelink debts given that the bulk of debts were caused by “administrative error and confusing rules”.
“Now they’re sticking the boot in by seeking to extract money we just don’t have to repay so-called debts we don’t even realise are hanging over us,” O’Connell added.
O’Connell also called for Centrelink debts to be halted until the model was redesigned to be centred on payment accuracy, including identification of underpayments to be back paid.