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We’ve paused debt repayments and internal reviews that may involve income apportionment in response to concerns about the way it was used in the past.
We’re working closely with the Department of Social Services to get a clear position.
The pause will stay in place until we have advice on the next steps.
Income apportionment doesn’t impact any payment rate or debt decisions relating to income earned after 7 December 2020.
What is income apportionment
It’s a practice we used to evenly divide, or apportion, a customer’s employment income across two or more Centrelink fortnightly reporting periods.
We used this method to work out how much income support you were entitled to in each fortnight.
We only needed to divide your income evenly if:
- Your employer pay period didn’t line up with your fortnightly Centrelink reporting period, and;
- Your payslip or income report showed your total earnings but did not show which days you worked or how much you earned in each Centrelink fortnight, and;
- We had no other information available.
Your payment rate was still based on the total income you reported across those fortnights.
However, your eligibility or payment rate may have been impacted if the actual days you worked in those fortnights were not evenly spread out.
Why we stopped using income apportionment
The practice ended on 7 December 2020, when new legislation made income reporting easier for our customers.
Prior to 7 December 2020, people had to report their gross earnings based on the number of hours they worked during each Centrelink fortnightly reporting period.
Reporting could be complex if a customer’s earnings period didn’t align with their Centrelink reporting period.
Since 7 December 2020, customers only need to report income as it appears on their payslip in the same Centrelink fortnight they actually get paid.
This means we don’t need to divide income across fortnights to work out your payment rate.
Why we’ve paused some debts
We’ve paused repayments on debts related to employment income earned prior to 7 December 2020. This doesn’t mean your debt has been waived.
We’ve done this as these debts may have been calculated using income apportionment.
We’re writing to people whose debts have been paused. We’ll send a text message between 31 October and 3 November 2023 to alert you about the pause.
We’ll then send you a letter, with more detail on the specific debts that are paused, from 6 November 2023.
If you get an SMS or a letter saying we’ve paused recovery of your debt, please don’t make any repayments on the debt.
If you get a payment from us, we’ll stop deducting repayments for the debt that has been paused.
If you have a direct debit arrangement set up with us, we’ll stop the arrangement while your debt is paused.
If you have regular BPAY payments or electronic transfers from your bank account, you’ll need to stop those yourself. If you have more than one debt, you can call our Centrelink Debt Recovery Line to confirm which debt you should stop payments for.
While these debts are paused, they might not appear in the ‘Money you owe’ service in your Centrelink online account. However, they will appear in your debt statement. We have information to help you get a statement of debt.
If you have other debts that aren’t impacted by the pause, recovery action will continue for those debts.
The pause will stay in place until we have a clear position on our next steps.
We’ll contact you again on those steps.
If you have requested a review of your debt
We’ve paused all internal reviews of debts involving income earned prior to 7 December 2020.
This has been in place since mid 2021.
If you already asked for a review of your debt related to income earned prior to 7 December 2020, your repayments will remain paused.
If you requested an internal review, there’s nothing you need to do.
We’ll let you know about any changes.
Read more about Reviews and appeals of a Centrelink decision.
If you’re concerned about a debt you have
Some debts and reviews that we’ve paused may not be impacted by income apportionment.
If we’re able to confirm that a debt is not impacted by income apportionment, we may restart recovery of that debt.
We’ll notify you before we restart recovering any debts that have been paused.
If you’re concerned about a debt you have, or you want to request a review, call us on our Centrelink Debt Recovery Line.
How this is different to Robodebt
Income apportionment is not Robodebt.
For income apportionment we divided a customer’s reported income to work out how their actual earnings affected their fortnightly Centrelink payment. It was done manually by Centrelink officers.
We took action on income apportionment when concerns were raised.
The Robodebt scheme used annual income averaged over 26 fortnights to raise historical debts.
Robodebt ended in November 2019. We no longer use income averaging to raise debts.
Read more information about Robodebt.
What are the next steps
We’re working with the Department of Social Services to determine next steps as quickly as possible. We’re keeping the Commonwealth Ombudsman updated on our actions.
We’ll update impacted customers when we know more.