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Centrelink debt collectors threatened to seize wages, inquiry told

3 April 2017
Christopher Knaus

Government-contracted debt collectors allegedly threatened to garnish a student’s wages unless she immediately paid $500 for a Centrelink debt that was in dispute, a Senate inquiry has heard.


One woman, a postgraduate student, said she was contacted by one of the three government-contracted debt collectors last year. The government is using the debt collection agencies in cases where former welfare recipients fail to respond to Centrelink’s correspondence about a debt. 

She alleged that the debt collector contacted her two weeks after Centrelink’s initial correspondence. At that stage, the government was supposed to give welfare recipients at least 21 days to respond.

She said the agency demanded she pay the debt in full immediately.

“My response to this was that I believed I didn’t owe the debt and that I was submitting for a review with Centrelink before I was happy to commence any repayments,” she said.

“They then further threatened to garnish my wages in full if I did not make a significant payment (minimum of $500 on the spot), to which, as any normal person would, I panicked and paid $500 using my credit card.”

The student said she continued to fight off debt collectors’ calls and requests for unaffordable repayments, while attempting to find old payslips from seven past employers to prove she did not owe Centrelink a debt. 

She estimated she had spent more than 100 hours tracking down old employers, requesting previous payslips, going to Centrelink, dealing with debt collectors, contacting politicians and working with lawyers. She said she was still fighting an $8,000 debt and planned to take it to the administrative appeals tribunal.

In the inquiry’s hearing last month, the Department of Human Services said it was confident that its debt collectors – the Probe Group, Australian Receivables and Dun and Bradstreet – were behaving appropriately.


In another submission to the inquiry, an individual said a $2,000 debt was passed on to the Probe Group, despite having lodged a dispute. 

“My details were passed on to Probe Group before I was notified of the outcome of my first review,” the submission read. “Worse, as I discovered today, the debt collectors have access to the same bank account information that Centrelink has on file.”

“I was advised by a Centrelink officer that Probe could see my bank account information, and could see that I have [amount redacted] in said account (this was information from 2012) and would be in a position to repay the debt.”

“I am thoroughly alarmed that this information has been passed on to a third party and consider this a tremendous breach of privacy.”

The privacy commissioner, Timothy Pilgrim, also made a submission to the inquiry.


A spokeswoman for the department said it investigates all complaints about the activities of external debt collectors. She said debt recovery action was now paused in cases where a review had been requested. 

That is a recent change to the system, prompted by public criticism just before Christmas.