The government has written off $76 million in welfare overpayments, declaring it would cost more to chase the debt than to waive it.
The Department of Human Services overpaid 1.5 million people a total of $1.5 billion, an average of $1000 each, during 2015-16. It clawed back $920 million by deducting money owed from ongoing social security payments or tax refunds.
But it wrote off $76 million in debts that were solely due to administrative error, were less than $50 “and not cost effective to pursue’’, or in cases where the debtor was subject to “extreme and unusual circumstances that interfere with their capacity to pay’’.
The debt does not include $148 million owed to the government by 76,526 families who have claimed too much family tax benefit.
The government will crack down on welfare debt next year under new laws that let it chase debts more than six years old.
From January 1, the government will start charging interest on social security debt in cases where the recipient refuses to repay the money.
People will be barred from flying overseas, even for a holiday, if they refuse to repay welfare debts including the dole, parenting payments or family benefits.
The Australian Council of Social Service yesterday warned that 731,300 children, or one in six, are now living in poverty.