What are Centrelink debts?

Centrelink is the Commonwealth Government agency which administers social security payments. Centrelink is part of the broader department of Services Australia. Centrelink is responsible for assessing payment applications, providing pensions and other payments, and recovering overpayments or debts.

An overpayment happens when Centrelink pays you more money than you were entitled to. Centrelink are required by law to recover money that has been overpaid. Centrelink does this by ‘raising’ a debt against the person. This means they calculate how much the person has been overpaid, and then contact the person and ask for this to be repaid. These debts are called Centrelink debts.

Overpayments can happen for many reasons. You may have been paid too much because:

• ‍Your payment wasn’t calculated correctly. For example, Centrelink might have had wrong information about your income or assets.
• ‍You did not meet the eligibility criteria for the payment you were receiving.
• ‍Centrelink didn’t have up to date information about changes to your circumstances. For example, this might happen if you don’t tell Centrelink about starting work or changing jobs, or about starting a relationship or moving house.
• ‍Centrelink made a mistake.‍
• Another reason.

‍Example: Jane was receiving Youth Allowance while studying at university. She was also working part time. Jane reported her income every fortnight, but she reported the “net” amount on her payslip rather than the “gross” amount she received before tax. As the wrong information was provided to Centrelink, the amount of Youth Allowance paid to her wasn’t calculated correctly. Jane now has a Centrelink debt for the amount of Youth Allowance that she wasn’t entitled to.

If you don’t know why you’ve been overpaid you can call Centrelink and ask a Centrelink officer to tell you the reason for the debt.  Understanding why Centrelink believes they have paid you too much can help you assess your options for challenging or otherwise addressing the debt.

Some Centrelink debts relate to whether you are single or have a partner, or your partner’s income or assets. These debts can be more complicated than other Centrelink debts. You should seek legal advice about your circumstances before challenging a debt of this kind as your options may be different depending on your specific circumstances.

Centrelink will ask you to repay money that you’ve been overpaid.

You have options for how you respond to the debt. The Self Help Tool can help you identify your options.

One of your options is to repay the debt.

If you cannot pay the money back in full by the due date you can ask to enter a repayment plan with Centrelink. This means you can pay a small amount back each week or fortnight, rather than the whole amount at once. This could be through deductions from your fortnightly Centrelink payment, or in separate instalments if you no longer receive Centrelink payments.

If you don’t pay the money back by the due date, or agree on a payment plan with Centrelink, Centrelink may take other action to recover the money. This could include:  

• Charging you interest or a recovery fee.
• Keeping your tax return or family assistance top up payments.
• Recovering money from other sources, including your work or bank account.
• Preventing you from leaving Australia.
• Taking other legal action against you.

‍If you agree to a repayment plan with Centrelink they will generally not take further action such as initiating legal proceedings.

You may wish to read more about repaying Centrelink debts back here.

Centrelink debts can be reviewed. You might also hear reviews referred to as ‘appeals’ or ‘challenging a debt’. These mean the same thing. During a review a decision maker will confirm whether the debt is correct and accurate, this usually involves recalculating the amount that was overpaid. This means the amount you owe could change if the decision maker finds you owe more or less money.

The decision maker will also consider whether recovery should be waived or written off, meaning you don’t need to pay the money back. This is explained in more detail on the next page.

Risk of fraud investigation and prosecution

If Centrelink believes a debt was caused by fraud – that is, they think you deliberately lied in order to gain a benefit – they may investigate you. This could lead to criminal charges against you. It is possible to receive a prison sentence if you are convicted of fraud.

You should be aware that any information and evidence you give Centrelink can be used against you.

You can seek legal advice about your individual circumstances before challenging a Centrelink debt.

If you have been dishonest with Centrelink, or Centrelink might think you’ve been dishonest, we strongly recommend you seek legal advice before challenging your debt. We also recommend seeking legal advice if the amount you owe is large.

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Risk of the amount you owe increasing

Challenging a Centrelink debt involves a decision maker looking closely at your situation and the circumstances of your debt. They may discover errors in how the debt was calculated. They may recalculate the overpayment and find you owe more money than originally thought. If this happens, the decision maker will likely change the decision and ask you to repay more money.