The Australian Government will wipe almost half of Australia’s social security debt backlog and roll out resolution payments of up to $600 for those impacted by the historical debt calculation method known as income apportionment.

The Australian Government yesterday announced a new $300 million package which includes a range of measures to ensure the social security system is producing fairer outcomes for Australians.

The threshold for waiving small, accidental debts will be increased to $250, with around 1.2 million debts expected to be waived or no longer needing to be raised in 2025-26 as a result.

People with historical debts affected by income apportionment from 2003 to 2020 will also be eligible to apply for a resolution payment.

To assist those affected to navigate the Resolution Scheme, the government will provide Economic Justice Australia and the Australian Council of Social Service with $400,000 each in funding.

New legislation will be introduced into the Parliament in the coming weeks to implement these measures.

The legislation will also include a measure to provide legal clarity to the historical practice of income apportionment, which ran from the early 1990s to 2020, to avoid the need to recalculate potentially millions of debts at a significant cost to Australia’s social security system.

Minister for Social Services Tanya Plibersek said in a media release:

“Our social security system is designed to be there for Australians when they fall on hard times, which is why it’s important debt recovery processes must be fair and transparent.”

“This $300 million package will mean Services Australia does not waste time or resources chasing accidental debts that are uneconomical to recover, and spare Australians with small debts significant stress. It will also provide compensation for those affected by the historical practice of income apportionment, in recognition of clear evidence it was invalid.”

“When the system provides good outcomes for both recipients and taxpayers, all Australians win.”

“Since coming into Government, we’ve strengthened Australia’s social security safety net in many ways, including by expanding Paid Parental Leave and delivering an almost 50 percent increase to Rent Assistance. We’ll continue to deliver on our promise to build a fairer Australia.”

The government will release more information about the operation of the income apportionment resolution scheme and how to apply following the passage of legislation.

 

 

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