Hundreds of thousands of Centrelink payments cancelled illegally, Albanese government admits

The Australian government has acknowledged that hundreds of thousands of Centrelink payments were illegally cancelled due to a flaw in the automated system managing the controversial mutual obligations scheme. Representatives from the Department of Employment and Workplace Relations confirmed at a senate estimates hearing that the number of unlawful cancellations was "in the vicinity" of 300,000.

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It is in the vicinity of that. But there are a couple of things that we need to consider and why there’s complexity.

These cancellations occurred when individuals were not given sufficient time to reconnect with job providers after missing a compulsory activity. This issue was initially highlighted by analysis from Economic Justice Australia, which reported in 2023 that 310,000 Centrelink payments may have been unlawfully cancelled between 2020 and 2024. At the time, the department had only publicly admitted to unlawfully cancelling 9,510 payments.

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The number of people who had their payments illegally cancelled when they were eligible (ie out of work) would be “a much smaller cohort”.

Payment cancellations under the scheme have been on hold since July 2024. Bronwyn Field from the Department of Employment and Workplace Relations stated that the total number of cancellations is complex, as many recipients find paid work above the eligibility threshold. However, she conceded that the number of people whose payments were illegally cancelled while still eligible for support would be "a much smaller cohort."

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Since we did this analysis, there have been two reports that have highlighted further issues around unlawfulness.

Economic Justice Australia estimates that approximately 20% of those affected might be eligible for remediation. Chief executive Kate Allingham expressed concern over the reliance on automated systems, noting that discretion is often not applied. "If things are happening automatically, for example, if I miss an appointment, they just hit a button saying appointment missed, and immediately you get a notification saying you need to contact otherwise your payment will be suspended. It puts people in really difficult situations," she said.

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If things are happening automatically, for example, if I miss an appointment, they just hit a button saying appointment missed, and immediately you get a notification saying you need to contact otherwise your payment will be suspended. It puts people in really difficult situations.