Are you paying huge amounts of debt? Here's why some of your payments may change soon

In a revelation that shocked many Aussies, Services Australia has been chasing $4.9 billion in unpaid debts.

Some of these debts date back decades and may have been miscalculated.

This news raised concerns among Australians, particularly those who have received or are currently receiving welfare payments.


As of October last year, Services Australia pursued debts from 829,266 customers.

The oldest debt on Services Australia's record dated back to 1979.

However, a number of these debts stemmed from the 1990s—a period when many of our readers may have been in the workforce or receiving assistance.


compressed-Services Australia.jpeg
Services Australia has several programmes that benefit Australians. Image Credit: Facebook/Services Australia


At the time, Services Australia used income apportionments.

It was a complex system heavily used due to the uncertainty about how payslips aligned with the fortnightly income reporting periods required for welfare payments.

This method involved creating a 'daily' average of income, which often led to customers being overpaid and subsequently served with a debt notice despite reporting their income honestly.

This practice, prevalent from the 1990s until 2020, has been under scrutiny following two investigations over the past two years.


These investigations revealed 147,773 debts that may have been unlawfully calculated, affecting 100,360 customers in the process.

This was an increase from the approximately 100,000 debts previously identified by the Commonwealth Ombudsman, who called for these debts to be waived.

The federal court is waiting for the outcome of an appeal after an administrative appeal tribunal found that income apportionment could result in individuals being pursued for debts.

In response to these findings, Services Australia assigned 150 staff members to work on income-apportionment matters since October last year.

'Since December 2020, income apportionment no longer occurs. The $4.9 billion owed includes outstanding debts that may be impacted by income apportionment,' Services Australia spokesperson Hank Jongen stated.

'A decision to waive or refund debts on the basis that income apportionment was used would need to be made by the government.'


Greens Social Services Spokesperson Penny Allman-Payne expressed concern over the possibility of Australians unlawfully pursued for Centrelink debts.

She emphasised the need for a fairer social security system that does not criminalise individuals for seeking support.

The Australian government agreed in principle to a Royal Commission's recommendation to reinstate a six-year limitation on debt recovery.

However, details about its implementation and its application to current debts remain unclear.

Allman-Payne continued to urge the government to act on this recommendation.

Meanwhile, the Antipoverty Centre's Spokesperson, Kristin O'Connell, called for a halt on all debt recovery activities.

O'Connell highlighted the need to protect welfare recipients from harmful debt collection practices until a safe system comes.


The Department of Social Services stated that the government is committed to improving social security debt arrangements.

They also ensured that debt raising and recovery were conducted in a timely, fair, and respectful manner.

For seniors, this news could mean that you may have been affected by these potentially incorrect debt calculations.

If you suspect that you have been wrongfully pursued for a debt, or if you have an old debt calculated using income apportionment, take action immediately.

Services Australia has been reviewing and appealing debts, and it is crucial to reach out to them for a reassessment.

You may be entitled to a refund or waiver, especially if your debt was calculated using the now-discontinued income apportionment method.
Key Takeaways

  • Services Australia started pursuing $4.9 billion in unpaid debts from over 829,000 customers, some of which may have been incorrectly calculated.
  • Investigations found 147,773 debts that may have been unlawfully calculated using income apportionment between the 1990s and 2020.
  • The government considered whether to waive or refund debts impacted by income apportionment following a court appeal and the Commonwealth Ombudsman's recommendation.
  • Calls for reform included implementing a limit on debt recovery and pausing all Centrelink debt raising and pursuing until a safe system takes place.
Have you or someone you know been affected by these debt recovery efforts? Are you already in talks with Services Australia about a reassessment? Share your experiences and thoughts about this change in the comments below!
 

Seniors Discount Club

Sponsored content

Info
Loading data . . .
Back in the early 2000's I was pursued for a debt with Centrelink which I had to pay back in fortnightly payments, it was for over $2000 and stemmed from my ex husbands pay not being counted in my parenting payment.
Iv'e often wondered how that could have happened when they had all the details of what he earned every week and my payment was calculated by them on that, with payslips included.
I really doubt I could do anything about it now because iv'e forgotten exactly when it was and for how much, and the exact reason.
 
In the early 2000s I had to pay back $5000 to centrelink due to a $2000 payment hubby earned.

At the time I was between jobs and receiving parenting payment
Hubby was working in real estate and on commission only.
He was lucky to make $30,000 a year.

At the time I thought it was a mistake and still believe it was .

They are chasing up money people owe them because of mistakes, are they also checking money they may owe people because of mistakes
 
I have been on aged pension for nearly 10 years and for all that time I have worked part time. Reporting my income, fortnightly, was no problem as my pay fortnight coincided with the Centrelink pay fortnight. Then back a few years Centrelink changed their pay fortnight and I had to use a spreadsheet to calculate how much of each pay went into one Centrelink period and how much went into the next. I was quite adapt at that but got a demand for payment from Centrelink saying that I owed several hundred $s due to being overpaid. I paid this off but bugger me if they didn’t change the pay periods again realigning them with what they were. Nearly a year later another demand (overpaid again). Now I am wondering if I can get some refund on this in light of the above article. I do note that refunds will only be made if the Government allows it. What are the chances??
 
In the early 2000s I had to pay back $5000 to centrelink due to a $2000 payment hubby earned.

At the time I was between jobs and receiving parenting payment
Hubby was working in real estate and on commission only.
He was lucky to make $30,000 a year.

At the time I thought it was a mistake and still believe it was .

They are chasing up money people owe them because of mistakes, are they also checking money they may owe people because of mistakes
They currently owe me money when they kept listing properties as assets, when they had already been given the settlement statements showing the properties had been sold.
This has happened to me three times when we've sold our home. I advise the new address, provide settlement papers
for the old home and then they stuff up somehow and one or the other gets listed as an asset and they cut payments.
Had a three hour drive to their nearest office just recently to clear it all up but they don't seem to be in any hurry to reimburse me.
 
In the early 2000s I had to pay back $5000 to centrelink due to a $2000 payment hubby earned.

At the time I was between jobs and receiving parenting payment
Hubby was working in real estate and on commission only.
He was lucky to make $30,000 a year.

At the time I thought it was a mistake and still believe it was .

They are chasing up money people owe them because of mistakes, are they also checking money they may owe people because of mistakes
It seems strange that we were both in a similar situation at the same time 🧐
 
  • Like
Reactions: Suzanne rose
I have been on aged pension for nearly 10 years and for all that time I have worked part time. Reporting my income, fortnightly, was no problem as my pay fortnight coincided with the Centrelink pay fortnight. Then back a few years Centrelink changed their pay fortnight and I had to use a spreadsheet to calculate how much of each pay went into one Centrelink period and how much went into the next. I was quite adapt at that but got a demand for payment from Centrelink saying that I owed several hundred $s due to being overpaid. I paid this off but bugger me if they didn’t change the pay periods again realigning them with what they were. Nearly a year later another demand (overpaid again). Now I am wondering if I can get some refund on this in light of the above article. I do note that refunds will only be made if the Government allows it. What are the chances??
yours and Buckleys
 
NOT SURPRISING THEY WOULD BE THE MOST INCOMPOTENT DEPARTMENT ANY WHERE I HAVE BEEN WAITING SINCE FEB 2023 FOR MY PENSION AND STILL WAITING. NOTHING BUT EXCUSES AND STUFF UPS
 
NOT SURPRISING THEY WOULD BE THE MOST INCOMPOTENT DEPARTMENT ANY WHERE I HAVE BEEN WAITING SINCE FEB 2023 FOR MY PENSION AND STILL WAITING. NOTHING BUT EXCUSES AND STUFF UPS
Contact your local member. I have always found that is the best way yo get government departments to "pull their finger out".
Of course, it totally depends on how good your local nember is.
 
  • Like
Reactions: deni67
I have been paying off a debt that I still don’t believe I owed, they went from one amount and then cut it in half. I don’t know of anyone else that it’s happened to. And they are still taking money from my pension for the debt. It was when the Robo part came in and it’s not a small amount that they said I owed. For over payment. I’m going to take it further to try and recover all the money that I’ve paid. Thank you
 
  • Like
Reactions: deni67 and Ezzy
And yet government have stopped chasing people when they don’t pay for their children and work for cash. It’s easy as the person just doesn’t open any mail from them. They just give up
 

Join the conversation

News, deals, games, and bargains for Aussies over 60. From everyday expenses like groceries and eating out, to electronics, fashion and travel, the club is all about helping you make your money go further.

Seniors Discount Club

The SDC searches for the best deals, discounts, and bargains for Aussies over 60. From everyday expenses like groceries and eating out, to electronics, fashion and travel, the club is all about helping you make your money go further.
  1. New members
  2. Jokes & fun
  3. Photography
  4. Nostalgia / Yesterday's Australia
  5. Food and Lifestyle
  6. Money Saving Hacks
  7. Offtopic / Everything else
  • We believe that retirement should be a time to relax and enjoy life, not worry about money. That's why we're here to help our members make the most of their retirement years. If you're over 60 and looking for ways to save money, connect with others, and have a laugh, we’d love to have you aboard.
  • Advertise with us

User Menu

Enjoyed Reading our Story?

  • Share this forum to your loved ones.
Change Weather Postcode×
Change Petrol Postcode×