Can you travel overseas if you owe a debt to Centrelink?

Whether it is an error on their part or you made an honest mistake, Centrelink will do anything it can to get its money back. From stopping you from leaving the country to sending debt collectors to chase down 99 year olds, Centrelink has introduced a number of innovative ways to motivate you to pay back your debt.  What are your rights when it comes to owing a debt to Centrelink?

Centrelink says you owe them money. What do you do?

Centrelink delivers approximately $90 billion in security and other benefits to more than seven million people in any given year. If you get an account payable notification letter from Human Services the Welfare Rights Network suggests the first thing you do is get a copy of your file from Centrelink. Just because Centrelink says you owe them money does not mean it is true. Centrelink sometimes miscalculates money owing.

With so many benefits to pay out to such a vast client base, mistakes can happen. Check the details and make sure the facts are correct. However, it is important to check the amount they say you owe before submitting an appeal to Centrelink because there is also a possibility that they made a calculation error that is not in your favor and you may end up having a higher debt than they first claimed.

Debts can be due to an overpayment on the part of Centrelink from receiving misinformation such as an underestimation of annual income, failure to lodge tax returns or not notifying the department of any change in circumstances.” However, overpayment can also just simply be due to a computer glitch or operator error.

According to an article in News.com, a report from the Auditor-General in 2013 revealed that “Centrelink ‘over-recovered’ debts from 7021 Australians, who ended up paying back $6.3 million more than they were supposed to.”

Maree O’Halloran, the president of the National Welfare Rights Network said in the above article that the debts were usually due to a mistake made by Centrelink or the person receiving the payment rather than anything that was done deliberately.  However, regardless of who or how the error was made Centrelink still expects the debt to be paid. Even people who are currently receiving welfare are expected to pay back their debt, which is recovered through a 15 per cent reduction in payments. News.com reports that one in eight people used a credit card to pay back a debt to Centrelink.

The Welfare Rights Network suggests you go to a Welfare Rights Centre in order to get independent advice prior to appealing.

Can owing a debt to Centrelink stop you from travelling?

Yes. According to reports in Huffpost Australia, new legislation introduced last month has given government agencies the power to enforce Departure Order Prohibition (DOPs) for anyone who owes a debt to Centrelink regardless of the amount of the debt or the amount of time they plan to spend overseas.

Under a DPO, officials from the Department of Immigration and Border Protection will not let you leave the country by air or vessel until the debt has been paid in full, a lump sum payment is made on the debt or a repayment plan has been arranged with Centrelink.

What is Centrelink doing to address this “really high level of overpayment?”

According to the Sydney Morning Herald, one in 10 of all Centrelink recipients, received more than they were entitled to between July and December 2014, including nearly 750,000 welfare recipients, creating what welfare advocates say was a “bonanza” for debt collectors.” The Auditor-General report shows that out of the one million Australians who owe Centrelink money, 279,103 were overpaid the family tax benefit and 286,121 were paid too much in Newstart allowance.

Over-payments are a systemic problem that is just “feeding the debt collection industry,” say welfare advocates. For example, Dun & Bradstreet and Recoveries Mercantile earned over $13 million in commissions for recovering Centrelink debts.

Human Services says it “ha[s] a number of debt reduction strategies to reduce over-payments in future” One such strategy is monitoring people’s Facebook and Twitter accounts to see if there are any discrepancies in reported behaviour.

There must be a better way to solve this over-payment problem than by Human Services employees lurking on Facebook.