Millions of Aussies could receive up to $600 in compensation over old welfare debts assessed using a method that was not consistent with social security law at the time.
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that → receive → time
Current and former welfare recipients with eligible debts affected by income apportionment can apply for a one-off payment through the Income Apportionment Resolution Scheme.
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recipients → affect → Scheme
The scheme, which was set up in January, allows a recipient to claim up to $600 for each eligible debt affected by income apportionment.
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recipient → set → apportionment
Australians have until January 29, 2027, to apply through their linked Centrelink account on myGov, where eligible debts will be displayed.
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debts → have → myGov
At the same time, Centrelink is resuming recovery action on almost 150,000 outstanding historic debts calculated using income apportionment after retrospective legislation made the debts valid and recoverable.
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debts → resume → apportionment
Income apportionment involved averaging a person’s employment income across two or more fortnightly Centrelink reporting periods.
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apportionment → involve → periods
The method was used from the late 1990s until 2020 and affected an estimated three million Australians, with the debts totalling $4.4 billion.
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debts → use → billion
While millions of the affected debts have been repaid, about 147,000 are still flagged as outstanding, with Centrelink now chasing repayments.
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Centrelink → affect → repayments
Current and former welfare recipients with eligible debts affected by income apportionment can apply for a one-off payment through the Income Apportionment Resolution Scheme
It's understood that many of the outstanding debts relate to alleged overpayments on social security payments which were handed out more than 10 years ago.
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which → affect → payments
Recovery action on affected debts was paused because of the pandemic and subsequent questions about the legality of income apportionment.
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action → affect → apportionment
Victorian mechanical plumber Matthew Chaplin’s case in 2025 became a test of how Centrelink could lawfully recalculate a debt relating to retail income he earned in 2014 and 2015.
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he → become → 2014
The Federal Court found in July 2025 that Centrelink could use an alternative method to determine whether a person had a debt.
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person → find → debt
In December, that same year, the Australian Government passed legislation that validated income-apportionment debts and allowed Centrelink to continue collecting outstanding amounts.
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Centrelink → pass → amounts
Meanwhile, the Income Apportionment Resolution Scheme was also established, allowing affected welfare recipients to claim up to $600 in compensation per debt.
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recipients → establish → debt
Mr Chaplin appealed to the High Court, which dismissed his case in June 2026 and found his debt could be lawfully recalculated by counting income in the fortnight it was received.
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it → appeal → fortnight
Centrelink has since been resuming recovery action on the debts and sending affected recipients ‘payment due’ notices.
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Centrelink → resume → notices
The High Court of Australia deemed the income apportionment method was unlawful and that Centrelink could use a different method to calculate whether a person had debt
Victoria
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person → deem → debt
Legal Aid's Economic and Social Rights Acting Associate Director Miles Browne argued the government should waive all income-apportioned debts.
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government → argue → debts
'There is so much complexity around Centrelink's debt raising and so many issues the government's encountered in terms of lawfulness that people just don't have any confidence that the debt they are paying off is correct,' Mr Browne told Nine News.
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Browne → be → News
'In our view, a waiver should have been contemplated and would have been appropriate given the debts had not been properly calculated.
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debts → contemplate → view
These debts were all very old, and in our experience, people were not only just confused, but had a lot of trouble finding the evidence to disprove the debts.'
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people → have → debts
Mr Browne added many Australians who have repaid these debts remain unaware of the resolution scheme, despite Centrelink informing current debt holders of the available compensation.
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Centrelink → add → compensation
He believes up to three million Australians, who have paid off a Centrelink debt in the last 20 years, could be eligible for compensation.
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who → believe → compensation
'No-one's been told about it, and we're concerned people aren't taking it up,' Mr Browne said.
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Browne → tell → it
A spokesperson for Services Australia explained Centrelink notified affected customers in January 2026 about the resumption of repayments and also informed them of the available compensation through the scheme.
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Centrelink → explain → scheme
'We encourage anyone who might have a debt impacted by income apportionment to apply for the Resolution Scheme,' the spokesperson said.
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spokesperson → encourage → Scheme
The Aporia
