About 1.2 million welfare recipients will have debts of up to $250 waived in a move Social Services Minister Tanya Plibersek said would “spare Australians with small debts significant stress”. Source: News.com.au.
Labor said yesterday it would increase the threshold for waiving accidental social security debts from $200 to $250, a move that will result in about 1.2 million debts being waived this financial year.
A Federal Court decision in July found the Department of Social Services could recalculate debts that were incorrectly calculated through income apportionment, a system that has since been deemed unlawful. The ruling allowed the department to pursue the historical debts that reportedly total more than $1.1 billion.
Income apportionment, which made assumptions about a person’s income when calculating a welfare recipient’s fortnightly payments, was used on hundreds of thousands of social security recipients since the early ’90s until laws were changed in 2020.
Australians who were affected by income apportionment debts between 2003 and 2020 will also be eligible to apply for resolution payments of up to $600.
Economic Justice Australia and the Australian Council of Social Service have also been awarded $400,000 in funding to administer the resolution scheme.
Ms Plibersek said the administrative cost spent on recouping the up to $300m in accidental debts would have been higher than the value of the sums owed.
“This $300m package will mean Services Australia does not waste time or resources chasing accidental debts that are uneconomical to recover and spare Australians with small debts significant stress,” he said.
“It will also provide compensation for those affected by the historical practice of income apportionment in recognition of clear evidence it was invalid.”
Government Services Minister Katy Gallagher said Labor wanted to learn from the “mistakes of former governments” and deliver a fairer and more cost-effective social security system.
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Labor to waive 1.2 million historical welfare debts totalling $300m (By Jessica Wang, News.com.au)
