Centrelink chases 150,000 over debts from once-unlawful method

Summarised from 2 outlets · Updated 27 Oct, 04:38 · Archive

Centrelink is pursuing almost 150,000 Australians for debts calculated using an income apportionment method once found unlawful.

Centrelink is ordering almost 150,000 Australians to repay debts using an 'income apportionment' method that a 2025 Federal Court test case found unlawful. The method averaged a person's income when their pay slips or work dates did not correctly match data in Centrelink's fortnightly reports, evenly dividing income across multiple reporting periods. The system, which was similar to the one used in Robodebt, was in place between the 1990s and 2020, generating three million debts totalling about $4.4m.

A Federal Court test case involving Victorian plumber Matthew Chaplin found the income apportionment method unlawful in 2025, with an alternative calculation method confirmed in July. In response, Services Australia paused repayments on approximately 147,000 potentially affected debts from 2023 onwards. However, new legislation passed in December 2025 validated all income apportionment debts, allowing the agency to resume collection. Services Australia stated it had written to customers about the pause and their review rights, though some argue the debts remain inaccurate.

How it is being reported

• ‘Disgrace’: Centrelink targets almost 150k over unpaid debts calculated by once ‘unlawful’ methodThe welfare system’s previous method of calculating debt was found to be unlawful but has since been renewed – now they’re chasing almost 150,000 Aussies.The West Australian · 27 Oct, 03:56
• ‘Disgrace’: Centrelink targets almost 150k over unpaid debts calculated by once ‘unlawful’ methodThe welfare system’s previous method of calculating debt was found to be unlawful but has since been renewed – now they’re chasing almost 150,000 Aussies.Perth Now · 27 Oct, 03:56

In this story: Centrelink · Services Australia · Matthew Chaplin · Victoria · Federal Court

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