The debt recovery system could hardly have been better designed to create conditions that cause chronic stress.
Its approach has potentially serious consequences. UK research shows when government policies placed new and onerous demands on people receiving welfare payments this led to an increase in mental health problems, and in suicides.
If this debt recovery program continues, it is quite possible we may see similar, adverse effects on people’s health in Australia. As such, the government should suspend the program and rethink its approach.
In light of evidence on stress and its social causes, Centrelink’s debt recovery program is highly likely to contribute to chronic stress among people already subject to socioeconomic disadvantage and/or other life demands. So it is likely to cause or exacerbate mental health problems and illness.
For a person with limited resources, receiving a government letter demanding payment of large debts and threatening legal action is very likely to undermine their sense of control over their life, especially given community legal centres are simultaneously being defunded.