Not fit-for-purpose: Shorten must immediately suspend “debt" collection activity
More stress, more physical and psychological harm and more suicides is the inevitable result of pursuing welfare recipients for so-called debts they cannot afford
The harm done to every person who received a Robodebt – large or small – must never be repeated. We extend solidarity to every person affected by the scheme.
Below: quotes from Antipoverty Centre spokesperson, proposals for new overpayment handling practices, Centrelink debt statistics, debt help and crisis line contact information.
While the royal commission report highlighted the shameful state of the social security system, neither its recommendations nor the government response go far enough to protect people who cannot afford to live from the harm caused by collection of so-called debts.
The decision to agree or agree in-principle to all royal commission recommendations shows that the government knows the current system of “debt” collection is untenable. But accepting recommendations means nothing without immediate, substantive action.
The Antipoverty Centre has been raising the alarm about government services minister Bill Shorten’s use of Robodebt victims and this royal commission to distract from an alarming increase in “debt” collection activity since Labor came to government.
In particular, we have called for the ASIC and ACCC debt collection guideline to be followed by Services Australia and the reinstatement of the 6-year limit on debt-raising many times. We welcome the government’s decision to pursue these changes and urge them to do so immediately and in full.
The Antipoverty Centre calls on the government to immediately suspend Centrelink debt collection activity and work with us on reforms to ensure no one is harmed by recoupment practices.
Media contact: 0413 261 362 / media at antipovertycentre.org
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Background
In June 2022 the Albanese government claimed 1 in 5 people received an incorrect JobSeeker payment, implying they believe there is mass fraud in the welfare system.1
In December Services Australia advised they are currently pursuing more than 1 million people for debts worth $5 billion in response to a senate estimates question on notice. This included debts dating back to 1979.2
Quotes attributable to Antipoverty Centre spokesperson and welfare recipient Kristin O'Connell:
We extend our solidarity to every Robodebt victim and everyone whose life has been affected by Centrelink recouping funds from those of us who can least afford it.
Services Australia and current debt collection policies are not fit-for-purpose. How can they be trusted to raise and pursue debts when they can’t even issue payments correctly?
If the government is serious about preventing a repeat of the harm caused by Robodebt it needs to do more than pick low hanging fruit.
More reviews, more consultation, more bureaucratic structures and administrative changes as announced by the government today will do little to materially help people faced with a “debt” they cannot afford.
There is no humane way to extract money from people living in poverty who cannot afford the basics.
Issuing debts to poor people is dangerous and harmful, “legal” or otherwise. It only brings more of the horrifying outcomes already produced by abhorrently low payment levels: distress, hunger, homelessness and suicide. None of the announcements made by the government today will prevent this.
We call on the government to immediately cease raising and pursuing Centrelink debts until a safe system can be designed that does not recover money from people who can’t afford to live.
Implement urgent and medium-term reforms
So-called debts are generally due to errors in the system or unfair, confusing rules. A lawful “debt” is rarely a fair debt. The government must stop treating accounting and administrative errors that lead to overpayments as cause for punishment and abandon its punitive debt recovery approach.
The government must immediately pause debt-raising and collection activities until safe processes for recovering overpayments are implemented.
In addition, we call on the government to make the following changes:
Remove unfair and confusing rules, simplify and improve reporting processes, and adequately staff Centrelink to remove factors that contribute to payment errors.
Replace the current debt collection unit with a team that is responsible for ensuring accurate payments were made, including identifying and rectifying underpayments.
Limit the period over which Centrelink is able to recover debts to 6 years and apply the same time period for backpaying underpayments (currently 13 weeks).
Change Centrelink processes to actively identify when a person qualifies for a debt to be waived under the social security act.
Treat unemployment as a valid reason not to harass people for debts as per examples in the ACCC and ASIC Debt collection guideline for collectors.
Where an amount needs to be repaid, this should operate similar to HECS-HELP where repayments are deferred until a person has a liveable income. If the government is concerned the person may never have a liveable income they should make welfare payments liveable.
Get help if you receive a Centrelink debt notice
If you receive a debt notice immediately contact a welfare rights community legal centre. It’s free and you can find the relevant legal centre in your area on the Economic Justice Australia website.
Although Robodebt has ended, many debt notices issued are inaccurate. Even if you receive an accurate debt, it can be waived in certain circumstances, including: “the physical and emotional state of the person together with their decision-making capacity and financial circumstances…”. You can find more information about debt waivers here.
The ACCC and ASIC debt collection guideline lists unemployment and low income as reasons a debt collector should not continue pursuing a person. You can find the guideline here.
Crisis support and counselling services
If you need support you can seek guidance, counselling or crisis help from the below organisations or talk to someone you trust.
Suicide Call Back Service – general: 1300 659 467
SANE Australia – general: 1800 187 263
13YARN – for First Nations people: 13 92 76
National Counselling and Referral Service – for disabled people: 1800 421 468
Headspace – for young people: 1800 650 890
QLife – fo LGBTQIA+ people: 1800 184 527
Full Stop – for people who have experienced sexual harassment and assault: 1800 385 578
Embrace Mental Health – multilingual service: embracementalhealth.org.au
MensLine – for men: 1300 789 978
Brother to Brother – for First Nations men: 1800 435 799
About the Antipoverty Centre
The Antipoverty Centre was established in May 2021 by people living on Centrelink payments to counter problems with academics, think tanks and others in the political class making harmful decisions on behalf of people they purport to represent.
We have deep expertise in poverty, disadvantage and unemployment, because we live it. Our goal is to help ensure the voices and rights of people living in poverty are at the centre of social policy development and discourse. We believe there should be no decision made about us without us.
The Antipoverty Centre is not aligned with any political party and does not accept funding that places political constraints on our work.
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