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Debt recovery

What powers does Centrelink have to recover a debt?

Centrelink has a wide range of powers to recover social security debts, including the power to:

  • make deductions from a person’s Centrelink payments
  • garnishee money from wages and bank accounts
  • prohibit the person from departing from Australia
  • commence legal proceedings

Is there a limitation period in which Centrelink must take action for a debt?

Since 1 January 2017 there has been no time limit on Centrelink recovering a debt [see s 1234B Social Security Act 1991 (Cth); similar provisions are contained in other relevant legislation]. Previously Centrelink had 6 years from the date the debt arose to take recovery action.

What happens if I become bankrupt?

If a person with a Centrelink debt becomes bankrupt, Centrelink cannot use its garnishee power or commence a court action for debt. The position in respect of deductions from social security payments is less clear. Advisors and people owing money should seek advice if this situation arises. Bankruptcy does not extinguish debts which arose through fraud.

Debt recovery  :  Last Revised: Mon Jun 4th 2018
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