Repayments halted on thousands of potential Centrelink debts
Oct 30, 2023 12:27:52 GMT 7
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Post by bear on Oct 30, 2023 12:27:52 GMT 7
Services Australia halts repayments on thousands of potentially unlawful Centrelink debts
Debt pause comes after watchdog found historical ‘income apportionment’ method breached social security law
Services Australia has paused repayments on thousands of potentially unlawful welfare debts but has warned income support recipients it’s too early to say if their debts will be waived.
In August the commonwealth ombudsman revealed that up to 100,000 debts or potential debts were incorrectly calculated over two decades by “unlawfully apportioning” welfare recipients’ income.
Services Australia responded by pausing the process of raising new debts for affected income earned before December 2020, but has now gone a step further by pausing repayments of those it has already claimed owed it money.
Since Friday the NotMyDebt campaign has received hundreds of reports from people who had faced debts related to income support payments saying that their debts were now missing from the personalised “money you owe” section of the Centrelink website.
"Up to 100,000 Centrelink debts or potential debts miscalculated over two decades, ombudsman finds"
Read more
Guardian Australia has confirmed two cases of such disappearing debts, including one former income support recipient who had been told they owed $4,000.
On Monday Services Australia explained it has “paused debt repayments and internal reviews that may involve income apportionment in response to concerns about the way it was used in the past” before 7 December 2020.
The agency maintains the new problem is separate to robodebt, where annual employment income was averaged over 26 fortnights to raise debts.
“We’re working closely with the Department of Social Services to get a clear position,” its website said. “The pause will stay in place until we have advice on the next steps.”
“This doesn’t mean your debt has been waived.
“While these debts are paused, they might not appear in the ‘Money you owe’ service in your Centrelink online account. However, they will appear in your debt statement.”
In some cases the payslips relied on by Services Australia to calculate welfare debts don’t align with the fortnightly income reporting periods. In these situations, the agency creates a “daily” average.
The ombudsman found that under the process of “apportionment”, welfare recipients’ employment income was spread across two or more fortnightly periods, which are used to calculate entitlement to Centrelink payments such as jobseeker.
This breached the Social Security Act, due to an “incorrect” but “genuinely” held understanding of the law.
"Prosecutors pause dozens of criminal cases after Services Australia miscalculated debts"
Read more
It is still unclear how many debts are affected. According to the ombudsman, Services Australia paused about 13,000 debt reviews and another 87,000 files may also be affected.
Services Australia said it is now “writing to people whose debts have been paused”, first by SMS then by a letter “with more detail on the specific debts that are paused”.
“If you get a payment from us, we’ll stop deducting repayments for the debt that has been paused,” it said. “If you have a direct debit arrangement set up with us, we’ll stop the arrangement while your debt is paused.
“If you have other debts that aren’t impacted by the pause, recovery action will continue for those debts.”
In August Guardian Australia reported that prosecutors have paused 32 criminal cases and are investigating possible wrongful convictions due to Services Australia’s misunderstanding about the lawfulness of income apportionment.
The social services minister, Amanda Rishworth, said at that time apportionment was a “really complex problem” that affected income support from 2003 to 2021.
“It is complex because on some weeks you may have been underpaid because of that method,” she told Guardian’s Australian Politics podcast.
“On other weeks you might have been overpaid – because you did actually earn the income. It’s just which fortnight was it apportioned to.”
Rishworth said she wanted to see “the legal questions resolved as soon as possible so there’s some certainty around this issue”.
Guardian Australia contacted Services Australia for comment.
www.theguardian.com/australia-news/2023/oct/30/centrelink-debt-repayments-paused-potentially-unlawful
Debt pause comes after watchdog found historical ‘income apportionment’ method breached social security law
Services Australia has paused repayments on thousands of potentially unlawful welfare debts but has warned income support recipients it’s too early to say if their debts will be waived.
In August the commonwealth ombudsman revealed that up to 100,000 debts or potential debts were incorrectly calculated over two decades by “unlawfully apportioning” welfare recipients’ income.
Services Australia responded by pausing the process of raising new debts for affected income earned before December 2020, but has now gone a step further by pausing repayments of those it has already claimed owed it money.
Since Friday the NotMyDebt campaign has received hundreds of reports from people who had faced debts related to income support payments saying that their debts were now missing from the personalised “money you owe” section of the Centrelink website.
"Up to 100,000 Centrelink debts or potential debts miscalculated over two decades, ombudsman finds"
Read more
Guardian Australia has confirmed two cases of such disappearing debts, including one former income support recipient who had been told they owed $4,000.
On Monday Services Australia explained it has “paused debt repayments and internal reviews that may involve income apportionment in response to concerns about the way it was used in the past” before 7 December 2020.
The agency maintains the new problem is separate to robodebt, where annual employment income was averaged over 26 fortnights to raise debts.
“We’re working closely with the Department of Social Services to get a clear position,” its website said. “The pause will stay in place until we have advice on the next steps.”
“This doesn’t mean your debt has been waived.
“While these debts are paused, they might not appear in the ‘Money you owe’ service in your Centrelink online account. However, they will appear in your debt statement.”
In some cases the payslips relied on by Services Australia to calculate welfare debts don’t align with the fortnightly income reporting periods. In these situations, the agency creates a “daily” average.
The ombudsman found that under the process of “apportionment”, welfare recipients’ employment income was spread across two or more fortnightly periods, which are used to calculate entitlement to Centrelink payments such as jobseeker.
This breached the Social Security Act, due to an “incorrect” but “genuinely” held understanding of the law.
"Prosecutors pause dozens of criminal cases after Services Australia miscalculated debts"
Read more
It is still unclear how many debts are affected. According to the ombudsman, Services Australia paused about 13,000 debt reviews and another 87,000 files may also be affected.
Services Australia said it is now “writing to people whose debts have been paused”, first by SMS then by a letter “with more detail on the specific debts that are paused”.
“If you get a payment from us, we’ll stop deducting repayments for the debt that has been paused,” it said. “If you have a direct debit arrangement set up with us, we’ll stop the arrangement while your debt is paused.
“If you have other debts that aren’t impacted by the pause, recovery action will continue for those debts.”
In August Guardian Australia reported that prosecutors have paused 32 criminal cases and are investigating possible wrongful convictions due to Services Australia’s misunderstanding about the lawfulness of income apportionment.
The social services minister, Amanda Rishworth, said at that time apportionment was a “really complex problem” that affected income support from 2003 to 2021.
“It is complex because on some weeks you may have been underpaid because of that method,” she told Guardian’s Australian Politics podcast.
“On other weeks you might have been overpaid – because you did actually earn the income. It’s just which fortnight was it apportioned to.”
Rishworth said she wanted to see “the legal questions resolved as soon as possible so there’s some certainty around this issue”.
Guardian Australia contacted Services Australia for comment.
www.theguardian.com/australia-news/2023/oct/30/centrelink-debt-repayments-paused-potentially-unlawful