Thousands of Australians are set to receive a text message telling them to hit pause on their Centrelink repayments.
In August the Commonwealth Ombudsman said the historical “income apportionment” practice used by Services Australia and the Department of Social Services had misinterpreted and unlawfully applied the Social Security Act from at least 2003 until December 7, 2020.
It meant some Centrelink customers’ employment income was assessed in the wrong fortnight and potentially affected a significant number of payments across almost two decades.
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About 86,000 people will begin hearing the ping of text messages on their phone “so they know we’ve paused recovery on their debts” from October 31, Service Australia said in an update online.
Letters will also be sent from November 6 with further information.
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Income apportionment does not impact payment rates or debt decisions relating to income earned after December 7, 2020, when new legislation brought with it a fresh method of income reporting, and “doesn’t mean your debt has been waived”.
“If you get a payment from us or have a direct debit set up, we’ll pause your debt repayments for you,” Services Australia said.
“If you make BPAY payments or electronic transfers from your bank account, you’ll need to stop those repayments yourself.”
Services Australia flagged again the issue was separate from Robodebt, which used an unlawful system of income averaging.
“We’re working closely with the Department of Social Services to get a clear position,” the federal government department said.
“The pause will stay in place until we have advice on the next steps.”
Services Australia has paused debt repayments for 86,000 Centrelink customers. Credit: AAP
It said the Commonwealth Ombudsman was being “updated on our actions”.
In August Social Services Minister Amanda Rishworth and Government Services Minister Bill Shorten said in a joint statement the miscalculations were serious and complex and agreed with the ombudsman it was a matter that had taken too long to resolve.
The ombudsman found Services Australia and the Department of Social Services “generally took appropriate steps to approach legal counsel but could have acted more quickly to finalise the resulting advice”.
Services Australia and the Department of Social Services, which reported the issue to the ombudsman in February, accepted or partially accepted four recommendations and a suggestion for reform.
– With AAP
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