Key facts
- Centrelink is pursuing $4.93 billion in outstanding debts, with the oldest over 40 years old.
- Approximately 1.34 million Centrelink debts are currently outstanding.
- The government has agreed in principle to a six-year statute of limitations on debt recovery.
- Advocates argue that old debts are often inaccurately calculated and should be waived.
- Services Australia has identified numerous debts potentially calculated unlawfully through income apportionment.
Centrelink is actively pursuing $4.93 billion in outstanding debts, with some of these debts dating back over 40 years. This practice continues despite the government's in-principle agreement to implement a six-year statute of limitations on debt recovery, a recommendation from the Robodebt royal commission.
Advocates, including Economic Justice Australia, are urging the government to waive these old debts, citing concerns about the accuracy of the calculations and the financial burden placed on individuals. Welfare expert Christopher Rudge from the University of Sydney has warned that the debt calculations cannot be trusted, especially for older debts calculated by outdated systems. He suggests that the cost of administering these old debts may exceed their value and that many individuals may be in financial circumstances prohibitive to repayment.
Recent data from Services Australia reveals 1.34 million outstanding debts, with a significant portion being decades old. Around 600 debts are over 30 years old, and 76,800 are between 15 and 30 years old. The oldest debt, raised over 40 years ago, is currently under a repayment arrangement.
Services Australia's debt collection system has faced significant issues, including the unlawful income apportionment that affected millions of Australians. While the government has introduced resolution payments and schemes to address these past injustices, concerns remain about the handling of historical debts. Kate Allingham, CEO of Economic Justice Australia, highlighted that previous government policy included a six-year limit for debt recovery, acknowledging the difficulty individuals face in recalling and providing evidence for old debts.
A spokesperson for the Department of Social Services stated that the government is committed to legal, fair, and compassionate debt recovery. They highlighted reforms implemented since 2022 to strengthen the social security system and prevent future injustices, including increasing the small debt waiver threshold and expanding the Income Apportionment Resolution Scheme.