Centrelink chasing debts again following COVID-19 pause

More than 1.3 million Australians who had their Centrelink debts frozen in the wake of COVID-19 will have to restart their repayments.

Australians who owe billions of dollars to Centrelink are being asked to restart their debt repayments.

Centrelink’s COVID-related national debt pause is now over, and Services Australia says from today it is contacting people who have been overpaid, after freezing 1.3 million debts totalling $4.5 billion last year.

Services Australia general manager Hank Jongen said people could expect to receive a letter in the mail or via myGov.

“From the start of February we’ll begin contacting people who owe money to let them know why they have been overpaid, the amount of the overpayment and their due date for repayments to commence,” he said.

Services Australia’s Hank Jongen says no repayments will be due before February 28.

The average debt amount frozen was $3485, and a major source of the debts are Family Tax Benefit payments because they are based on estimates of people’s incomes during a financial year and only reconciled at tax time.

Mr Jongen said people who had paused payment arrangements would be sent a letter 21 days before their repayments were due to start.

“The earliest anyone will need to start repaying money is 28 February 2021,” he said.

“We want people to know they don’t need to repay their debt all at once – most people set up a payment arrangement and repay it over time.

“The easiest way to manage repayments is online — using their Centrelink online account through myGov or the Centrelink app.”

Mr Jongen said people who could not pay, were experiencing hardship or did not understand why they had been overpaid should contact their regular payment line, and not ignore the letter.

Centrelink debt that is not repaid can attract interest charges above 7 per cent and involve debt collection agencies Milton Graham, Probe Operations and ARL Collect. It can also lead to Departure Prohibition Orders preventing people from leaving Australia.

There was a surge in demand for Centrelink benefits when COVID-19 struck. Picture: William West/AFP

The current debt doesn’t relate to the failed Robodebt scheme, which used computer algorithms to pursue Centrelink clients for money they didn’t owe, and resulted in a $1.2 billion class action settlement for 430,000 people last November.

Australian Unemployed Workers Union (AUWU) spokeswoman Kristin O’Connell said Robodebt had been a disaster that hurt hundreds of thousands of people, and she said the government now wanted to “try and resolve minor accounting errors by extracting money from the poorest people in society”.

“The AUWU strongly urges anyone in financial distress who is being asked to make even the smallest repayments to learn about their rights by reading the ACCC debt collection guidelines and calling the National Debt Helpline,” she said.

“We deserve to eat properly, access medical care and have a roof over our head. We don’t deserve this.”

Services Australia’s latest annual report shows 9.3 million Australians received at least one Centrelink benefit last financial year.

@keanemoney

Originally published as Centrelink chasing debts again following COVID-19 pause