Dear Abe,

I received a letter from Centrelink that I have been overpaid and I owe hundreds of dollars back. I heard recently in the news that Centrelink has been falsely accusing people of owing debts. Do I have to pay this money back if I really need it?

Broke


Dear Broke,

If Centrelink write to say you’ve been overpaid Youth Allowance or Austudy and owe them money, don’t ignore it. Deal with it straight away and quickly.

Check the facts and the letter. Check your University or financial records to see if you really have been overpaid. It may be because they think you have not declared your correct income or have not told them that you have gone part-time (i.e less than 18 cp per semester). You may need to ask for a copy of your Centrelink ‘file’ too. If they get it wrong, you can appeal.

If the debt is legitimate, check that it is the correctly calculated amount. They deal with thousands of people everyday. It would not be unheard of for them to make a mistake. Did they get the dates and amounts right? If you have had a problem (“breach”) with them before you may also be charged a further 10% penalty. They can give you this penalty also if you have been reckless or misleading when giving them information. You can appeal a 10% penalty too.

Ideally you would pay off your debt as quickly as possible. Talk to the University’s Financial Assistance Office to see if they will give you an interest free loan. Paying them quickly will show Centrelink that you genuinely want to mend the error of your ways. But if you have no way of paying it off, negotiate a payment plan with them. They can also take it out of your on-going Centrelink payment. They may want to take more money than you can likely afford. Be prepared to explain to them how this will cause you financial hardship by outlining how much you spend on things like rent, food and medication. The main thing is to keep in contact with them.

If you have deliberately given incorrect information that has caused an overpayment, this is a serious issue. For example, if you have been working, but have not declared your income, and you have accumulated a debt of over $10, 000 (or lower in some other circumstances) Centrelink will not only have you repay the debt but also try to prosecute you for fraud, which can carry a sentence of up to 12 months in jail. The SRC strongly recommends that you consult with a SRC Caseworker before talking to Centrelink. In general we suggest you only consider answering questions in writing, and do not answer any questions in a recorded interview.

If you have been overpaid because of a mistake that they made, not due to incorrect or false information from you, then you may be able to keep that money even though it is an overpayment. There are some reasonably rare occasions where you may be able to get your debt written off or waived (cancelled). Of course there are conditions. Talk to SRC caseworkers about this too.

Abe