Centrelink threatens to charge interest on $900m worth of welfare debts
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The Federal Government has decided to go after almost 170,000 Australians who have welfare debts, threatening to charge them interest on the funds owed which have topped more than $900 million nationally.
Key points:
- Centrelink is targeting people who have debts racked up from former false claims
- Human Services Minister Michael Keenan says the debts date back 15 years
- Mr Keenan says people deliberately defrauding the system could face police action
Those in the Government's sights are no longer claiming welfare benefits, but racked up debts from former false claims.
The Government has not charged interest on such welfare debts before.
"Some of these debts go back up to 15 years," Human Services Minister Michael Keenan said.
"But moving forward, it's very important that if you earn money, and you're not doing anything about repaying that money when you have the capacity to repay, then your debt is going to accrue interest and continue to increase."
The Department of Human Services has started contacting people owing money and told them they have a month to commit to a repayment plan, or be slugged the interest charge — which sits at 8.77 per cent.
Mr Keenan conceded the Federal Government has been too lenient in the past.
"People just haven't made any effort to repay it, and the Commonwealth has continued to engage with people, reminding them to repay it," Mr Keenan said.
"There's all sorts of ways that we can escalate that, including sending our debt collectors."
One extreme example of outstanding debts comes from Queensland, where the Government alleges a former welfare recipient owes about $800,000 from a series of false welfare claims — including for children that did not exist.
The Department has only clawed back $3,000 to date.
Mr Keenan was asked whether criminal charges should be pursued as a priority in that case, alongside the debt recovery.
"If people are deliberately defrauding us, then we will make referrals of that to the police, and they will look at it in conjunction with the Commonwealth Director of Public Prosecutions," Mr Keenan said.
"Just because we're chasing you for the debt, doesn't preclude us from taking other actions such as police action."
The Coalition's welfare fraud crackdown has faced significant criticism in the past.
The bungled Centrelink robo-debt program resulted in large numbers of people wrongly pursued for overpayment of social security benefits.
A Senate inquiry into Centrelink's handling of the saga called on the program to be suspended.
Topics: welfare, community-and-society, government-and-politics, australia
