What are your rights if you receive a Centrelink debt letter?
30 January 2017
The Law Society of SA and Welfare Rights Centre (SA) are reminding people who have received debt letters from Centrelink that they have the right to appeal debts and other fees if they think Centrelink has made an error.
“There have been reports of stress and confusion caused by the recent spate of letters sent by Centrelink to some customers indicating an obligation to pay a debt,” said Law Society President Tony Rossi. “It’s important that people affected are aware of their rights.”
“Centrelink decisions are appealable,” Mr Rossi said. “Anyone who disagrees with their debt, or thinks there are special circumstances as to why the debt should not apply, can appeal the decision.”
“It’s critical for anyone who has doubts over a Centrelink decision to contact Centrelink as soon as possible,” Mr Rossi said. “If the issue is still not resolved, there are other avenues available to appeal.”
“Experience tells us that automated systems don’t always get it right. While it can be frustrating to go through the process of rectifying a bureaucratic error, mistakes happen, and the best thing to do is to notify Centrelink immediately if you think they’ve got it wrong.”
“Receiving a debt letter can be extremely distressing. But if you have a genuine reason to dispute it, you can get free advice from the Welfare Rights Centre about what to do next, or contact the Law Society’s referral service to be put in touch with a lawyer who could assist.”
WHY DID I GET A LETTER FROM CENTRELINK?
In July last year, the Department of Human Services implemented a data matching system which cross references customers’ reported income to Centrelink with data from the Australian Tax Office. If the system identifies a discrepancy between the income you reported to Centrelink and the ATO’s records, Centrelink sends you a letter headed “Important Information about your employment income”.
WHAT DO I NEED TO DO IF I RECEIVE A LETTER?
The letter will ask you to go online and verify your income. You should do this as soon as possible. If you do not contact Centrelink within 21 days of receiving the letter, Centrelink may charge a 10% recovery fee.
When you go online, you will be able to either confirm the information about your employment income or correct it. Once this is done, the system will automatically calculate your debt (if you still have one).
CENTRELINK & THE ATO HAVE MY INCOME DETAILS WRONG. HOW COULD THIS HAPPEN?
The ATO may have calculated your reported income over a full year even though you may have only worked for a part of the year, thus over-estimating your income. This is why it’s important to go online and make sure the period of employment is recorded correctly.
The ATO also might have recorded a different employer name than the one you reported to Centrelink (e.g. company name vs trading name), causing the system to count your income twice.
I DON’T AGREE WITH MY DEBT. WHAT CAN I DO?
The Welfare Rights Centre recommends that even if you don’t agree with your debt, you should arrange a payment plan if you have the capacity to do so. If you successfully appeal your debt, the money you paid will be returned to you.
If you have questions about your debt, you can click a link on the myGov website to request a specialist Centrelink officer to call you within seven days to explain the debt. If you still disagree with the debt, you can appeal your debt to a Centrelink Authorised Review Officer. This process is free. You can also appeal any interest fees or recovery fees. Remember, you can also appeal your debt if you think there are special circumstances as to why you should not have to pay it.
If unsuccessful, you can then appeal to the Administrative Appeals Tribunal, which is also free.
Anyone who is considering appealing their debt can contact the Welfare Rights Centre (SA) for free legal advice on 8223 1338; email: firstname.lastname@example.org, or web: www.wrcsa.org.au. Alternatively, contact the Law Society on 8229 0200 to get a referral to a lawyer who can assist.
The National Welfare Rights Network has prepared a helpful guide about Centrelink’s online debt system.
Media contact: Michael Esposito 0422 073 146 email@example.com