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Govt removes expiry limit on welfare debt, allowing Centrelink to hound you forever

19 January 2017
Stephen Easton
Crikey

Before January 1, Centrelink debts expired if the agency ignored them for six years. Now it can pursue them at any time like the Tax Office, but within the agency there is confusion about the implications, writes Stephen Easton, journalist with The Mandarin.

Just as Australians were ringing in the new year and the public campaign against Centrelink’s massively scaled-up debt recovery program was beginning to pick up steam, a legislative change removed a time limit that meant a certain number of welfare debts used to expire.

Previously, unlike other debts to the government, notably those owed to the Australian Taxation Office, welfare debts would lapse if no action was taken to recover them in six years.

Agencies like Centrelink could fairly easily restart the six-year limit, by taking a basic action like opening the client’s record and doing a basic review, but nonetheless it resulted in some debts expiring because the agency did not have enough resources to pursue them all.

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There’s apparently a view in the agency that now there is nothing stopping the automated compliance program from going back through tax and welfare records “indefinitely” to find new debts to raise.

But an independent expert in social security law said this was not quite right; the six-year limit only ever applied to debts after they were raised. The clock started when the agency became aware of the debt (or when it reasonably should have — for example, if it was notified of an overpayment but failed to actually raise a debt for six years or more).

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The further back Centrelink goes looking for past discrepancies between taxable income and support payments, the less chance there is that the people advised of potential debts will be able to produce payslips or other records to prove they were not overpaid.

The National Social Security Rights Network (previously the Welfare Rights Network) opposed the removal of the six-year expiry date. In a recent statement, it says a lot of people are contacting it in distress because they do not realise “the system does not necessarily require people to have documentation from many years ago” and think that “without it they cannot provide the information being sought” by Centrelink.