Centrelink Chases $4.93bn in Debts, Some Over 40 Years Old, August 10

Centrelink is chasing $4.93 billion in unpaid debts, with the oldest dating back more than 40 years, according to new data from Services Australia. The government agreed in principle to limit debt recovery to six years following the robodebt royal commission, but has not said when or if that will apply to existing debts. Legal advocates and welfare experts are now calling for old debts to be wiped, citing concerns about system accuracy.

The scale of Centrelink’s debt problem

Services Australia data shows 1.34 million outstanding Centrelink debts totalling $4.93 billion. About 645,000 people have repayment arrangements in place. The oldest debt was raised over 40 years ago and is now under a repayment arrangement, though the department refused to disclose the amount. Around 600 debts are more than 30 years old, with a median of $5,451.49 each.

Why old debts remain despite government promises

The Australian government agreed in principle to the robodesk royal commission’s recommendation to reinstate a six-year limit on debt recovery, but has not announced when this will happen or whether it will apply to debts already on the books. Interest is also being applied to some outstanding debts where recipients have not maintained acceptable repayment arrangements. Christopher Rudge, a welfare expert at the University of Sydney, warned that debt calculations cannot be trusted to be correct.

Systemic failures and calls for debt forgiveness

Services Australia’s debt collection system has been in chaos for years. The government announced last year it would pay up to $600 in resolution payments to people affected by unlawful income apportionment. Around 44,000 Australians have been found to have overpaid their Centrelink debts, some by $20,000 or more. Peak legal body Economic Justice Australia and other advocates now want the debts wiped, citing the system’s track record of errors.

What this means for welfare recipients

Australians facing old Centrelink debts have limited options under current law. Free legal advice is available through community legal centres, the Welfare Rights Centre, and the Financial Rights Legal Centre. The National Debt Helpline (1800 007 007) operates 9am to 4.30pm local time. Aboriginal and Torres Strait Islander people can call Mob Strong Debt Help on 1800 808 488. Without legislative change, recipients must either negotiate repayment arrangements or lodge appeals.

Final Thoughts

Centrelink’s pursuit of decades-old debts exposes a system that experts say cannot be trusted. Until the government implements the promised six-year limit and audits existing debts, Australians will remain liable for amounts that may be incorrect.

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