Tens of thousands of Australians will receive a text instructing them to put a temporary halt to their Centrelink repayments. It comes after an investigation by the Commonwealth Ombudsman in August revealed the longstanding “income apportionment” practice used by Services Australia and the Department of Social Services had erroneously and unlawfully applied the Social Security Act from as far back as 2003, up until December 7, 2020.
This meant Centrelink customers’ employment income had been incorrectly assessed within specific fortnights, potentially impacting a significant number of payments spanning almost two decades.
Services Australia recently announced approximately 86,000 people would begin receiving text messages notifying them of the temporary suspension of debt recovery starting from October 31. Letters containing additional information will be dispatched from November 6.
It’s important to note the income apportionment issue does not affect payment rates or debt decisions concerning income earned after December 7, 2020, when new legislation introduced a fresh method of income reporting.
The announcement stressed that this doesn’t mean your debt has been waived. Services Australia assured recipients of payments or those with direct debits in place that their debt repayments would be paused automatically. However, individuals making BPAY payments or electronic transfers from their bank accounts must cease these repayments independently.
Services Australia said this issue was separate from the controversial Robodebt scheme, which had used an unlawful income averaging system.
The department added, “We’re working closely with the Department of Social Services to get a clear position,” and reiterated, “The pause will stay in place until we have advice on the next steps.”
It also mentioned the Commonwealth Ombudsman was being kept informed of their actions. In August, Ministers Amanda Rishworth and Bill Shorten acknowledged the seriousness and complexity of the miscalculations in Social Services and Government Services.
They concurred with the ombudsman’s assessment that the matter had taken too long to resolve. The ombudsman’s investigation found that Services Australia and the Department of Social Services had “generally taken appropriate steps to approach legal counsel but could have acted more quickly to finalise the resulting advice.”
In response to the findings, Services Australia and the Department of Social Services, which had reported the issue to the ombudsman in February, accepted or partially accepted four recommendations and a suggestion for reform.