Centrelink pursuing debts that are more than 40 years old despite agreeing to waive old arrears

Centrelink is actively pursuing $4.93 billion in unpaid debts, with the oldest claims originating more than four decades ago. This pursuit continues despite the government's agreement in principle to implement a six-year statute of limitations on debt recovery.

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the debt’s calculations cannot be trusted to be correct.

Advocates, including the peak legal body Economic Justice Australia, are calling for these old debts to be waived. Australia's leading welfare expert, Christopher Rudge, a University of Sydney academic, has expressed serious doubts about the accuracy of the vast sum of debt. He points to the ongoing chaos within Services Australia's debt collection system, which has previously led to significant errors, such as unlawful income apportionment, resulting in overpayments for many Australians.

Data from Services Australia reveals 1.34 million outstanding debts totaling $4.93 billion. Around 600 of these debts are over 30 years old, with a median amount of $5,451.49. The oldest debt, over 40 years old, is currently under a repayment arrangement, though the department withheld the specific amount due to privacy concerns. Interest is also being applied to some outstanding debts.

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For all other remaining historical debts, many are decades old and were calculated long ago by systems incompatible with today’s auditing tools.

Rudge argues that the debt calculations cannot be trusted, especially for older debts processed by outdated systems. He believes the government's in-principle acceptance of a six-year limit should immediately render debts older than that "out of bounds." Furthermore, he suggests the administrative cost of pursuing these decades-old debts might exceed the amounts themselves, particularly for individuals likely facing significant financial hardship.

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In many circumstances where people have held debts for a decade or longer, it is likely that they are in financial circumstances that are prohibitive.