Government wipes 1.2 million Centrelink debts as waiver threshold raised
Almost half of the social security debt backlog has been wiped out.
Australians owing Centrelink under $250 have had those debts wiped after the government raised the waiver threshold.
For the first time in 30 years, the threshold has been lifted from $200 to $250, effective from last Friday, Social Services Minister Tanya Plibersek in a statement.
The change is expected to clear about 1.2 million debts in 2025-2026, wiping roughly half of the backlog.
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By continuing you agree to our Terms and Privacy Policy.The government said pursuing small debts often costs more than recovering them, particularly following issues linked to an unlawful calculation method used before 2020.
The threshold will now be indexed annually from July 1 in line with the Consumer Price Index to maintain its value over time.
Plibersek said the reforms would ensure better use of taxpayer money.
“The (social security) system also needs to be good value for taxpayers too,” Plibersek said.
“Our landmark social security debt reforms do just that.
“The changes taking effect today will make sure Services Australia is not wasting taxpayer dollars on small scale debt recovery, while also protecting recipients from experiencing unnecessary stress over minor, accidental debts,” Plibersek said on Friday.
“It also means that many more people will be able to access advance payments and other payments in our social security system that are not available to people with a debt,” she added.
The measures form part of a $300 million package announced last August aimed at improving fairness in the system.
The initiative also allows people affected by the historical debt calculation method between September 20, 2003 and December 6, 2020 to apply for compensation of up to $600, with applications closing on January 29, 2027.
In addition, a range of payments and allowances have increased through indexation, benefiting more than five million Australians.
Recipients of the Age Pension, Disability Support Pension, Carer Payment, Parenting Payment and JobSeeker are set to receive higher fortnightly payments from their next pay day.
Nearly one million renters will also benefit from increases to Commonwealth Rent Assistance.
Plibersek said the social security system supports millions of Australians.
“Whether it’s aged pensioners or young children, we want every Australian to get the help they need when they can’t work or need a bit of support to make ends meet,” Plibersek said.
“Combined with real increases to payment rates, our Income Apportionment Resolution Scheme, and new protections for victims of financial abuse, the government is ensuring the social security system is there to support those who need it most.”
Originally published on 7NEWS
