Centrelink debt recovery of decades-old welfare debts, Digi Mart USA News (Kaitangata, New Zealand): Iain Milne, a 72-year-old former Queensland police officer and pensioner living in the small historic town of Kaitangata on New Zealand’s South Island, was surprised in September to receive a letter from Centrelink. He initially assumed it was routine correspondence from Australia.
The letter was a debt recovery notice claiming Milne owed $400 in a debt that was being unpaused. Milne said he was not initially worried, since the amount was manageable, but he said the matter quickly became much more serious.
When Milne called Centrelink to ask about the debt, he learned it related to alleged overpayments of the Newstart allowance he had briefly received while living in Australia in 2005. Services Australia also told him he owed $6,200 for disability support pension payments he received in 2002.
Milne said he received the disability support pension for less than a year, decades ago, due to PTSD he suffered from his 12 years as a Queensland police officer. In 2002, he separated from his wife of 19 years and moved back to New Zealand, and he said Centrelink continued paying his disability support pension into a joint account that he no longer had access to, while his former wife did.
Milne said he did not believe his former wife deliberately kept the payments. He acknowledged he should have informed Centrelink that he was leaving the country, but said he was overwhelmed by personal upheaval at the time.
Four months after returning to New Zealand, his mother died, and the following years were marked by a major struggle with depression, including periods of hospitalisation.
Milne said he later moved back to Australia from 2005 to 2007, during which he briefly received Newstart payments before finding work as a caretaker at a Queensland retirement home. It is believed Centrelink raised the Newstart and disability support pension debts during that period, and Milne said his wages were garnished to make some repayments, although he said he was completely unaware of the disability support pension debt.
Milne said he had always tried to report his income correctly and was flabbergasted that Centrelink was now pursuing a debt dating back 24 years. “Surely 24 years is just beyond the pale, it is ridiculous,” he said.
“Why me, now, as a pensioner? I could die tomorrow.
Are you going to chase me to my grave?”
Milne’s $400 Newstart debt is one of 147,000 current Centrelink debts calculated using income apportionment, a method later found to be unlawful. Those debts had been paused for six years, first because of the pandemic and then because of questions about their legality.
Income apportionment averaged a recipient’s earnings across fortnightly periods rather than using exact pay dates, and was used to raise millions of debts from the late 1990s to 2020.
In December 2025, legislation was passed to retrospectively validate those sums, allowing Centrelink to continue collecting the debts. Centrelink began unpausing and gradually calling in the debts in June.
Services Australia General Manager Hank Jongen said, “We recognise the time taken to resolve income apportionment has led to uncertainty and frustration for some customers.” He added, “At each stage of the income apportionment pauses, we’ve kept customers informed directly through letters and other notifications, and through our website.”
Milne discovered that his file was flagged after New Zealand’s Work and Income department, which administers his local pension, asked him in January to complete a form applying for an Australian part-pension based on years he had lived and worked across the Tasman. That paperwork alerted Services Australia, and while his file was matched early in the year, the debt remained frozen until September, when it was unpaused along with other income-apportioned arrears.
Milne is now joining calls from legal advocates urging Centrelink to stop pursuing debts more than six years old. Advocates, legal services and the Commonwealth Ombudsman have repeatedly raised concerns about the fairness of pursuing welfare debts that stretch back decades.
Critics argue that requiring people to produce decades-old payslips, bank statements or employer records is virtually impossible, and they urge the federal government to implement a firm statute of limitations or waive debts older than six years.
According to Services Australia data from October 31 this year, Centrelink is pursuing 1.34 million outstanding debts totaling $5.02 billion. About 600 of those debts date back more than three decades, the oldest is 40 years old, and almost 77,000 are between 15 and 30 years old.
Before 2017, Centrelink could only pursue debts less than six years old, but that limit was removed during the Robodebt era, allowing the department to go further back.
The Robodebt royal commission’s final report recommended reinstating the six-year time limit. A spokesperson for the Department of Social Services said the government had “accepted-in-principle” the recommendation and “will continue to explore our options to implement this recommendation.”
Digi Mart USA News has been contacted by dozens of distressed Australians whose historical debts, many dating back more than 15 years, have suddenly been unpaused. Michael, an 81-year-old pensioner who asked that his surname be withheld, said the sudden revival of two Centrelink debts belonging to his wife had caused untold stress.
His wife, Joan, is now on the disability support pension, but her two debts totaling $8,400 date back 17 years to 2009 and 2010, when she was on Newstart. Michael said the debts were raised because his wages were allegedly under-quoted, but the couple no longer has records stretching back 17 years, and his former employer is out of business.
Joan discovered the debts had been unpaused only last month when she applied for a standard advance on her pension payment, something she had done without issue many times before. She was abruptly refused and told the debts were the reason.
Michael calculated that repaying the debt at the minimum rate of $15 a fortnight would take more than 20 years, by which time he would be over 100. “We have no hope of paying this off – we will take it to the grave, and then Centrelink still misses out,” he said.
