Centrelink to charge welfare cheats interest on $900M debt

Welfare cheats will be given one month to pay back their debts or risk forking out a significant interest charge on their false Centrelink claims.

According to a report by the ABC, the Department of Human Services will for the first time charge people interest on their debts owed at a rate of 8.77 per cent in a bid to claw back the $900 million owed in falsified welfare claims.

The government has already began contacting its targets and will give them one month to negotiate a repayment timeline, or risk paying the interest.

Human Services Minister Michael Keenan told the ABC the government has been too soft on welfare cheats in the past, enabling hundreds of people to get away with rorting the system.

If people fail to come to an agreement with the department, debt collectors and possibly even the police would be called in to manage the case.

“If people are deliberately defrauding us, then we will make referrals of that to the police, and they will look at it in conjunction with the Commonwealth Director of Public Prosecutions,” he said.

The crackdown is part of the government’s ongoing joint investigation by the Department of Human Services and the Australian Transaction Reports Analysis Centre into widespread welfare fraud that’s costing taxpayers millions every year.

The two organisations are using data matching to analyse income and amounts claimed through Centrelink. According of official figures, the operation has already saved taxpayers $43.4 million.

The average amount each welfare recipient was ordered to repay was $43,000 – nothing to be sneezed at, and individual cases show dozens of people have ripped off hundreds of thousands in false or incorrect claims.

In one case, a New South Wales disability support pensioner was ordered to repay $160,000 after failing to explain the source of $700,000, which had been deposited into their bank accounts over four years, having not declared any income to the department during that period.

Meanwhile, a Perth parent was ordered to repay more than $100,000 after investigators discovered income totalling $220,000 had not been declared to the Department. Instead, just $35,000 had been declared.

A Victorian retail worker was also caught after they earned $100,000, but only declared $20,000 of that income. They were ordered to repay $30,000 and were sentenced to a two-year good behaviour bond after they pleaded guilty to welfare fraud.

“Australia has a very generous welfare system and it needs to operate with integrity to ensure those who genuinely need our support receive it,” Keenan said.

“We will leave no stone unturned in finding those who are defrauding the system, and we’ll use every weapon in our arsenal to bring them to justice.”

Do you think this is the right call? Should welfare cheats face harsher punishments?