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Finding a Simple Solution to Managing Debt Collection Rules

2 February 2017
David Tennant
ProBono Australia

There has been a lot of public discussion about Centrelink’s automated system of data matching and resultant debt collection. It may come as a surprise however that Centrelink is not required to comply with normal debt collection rules.


The debt collection guideline could be really useful to Centrelink. It recommends, for example, accurate record keeping (clause 10), providing information when it is requested (clause 11) and suspending collection activity if there is a genuine dispute about the existence of an alleged debt (clause 13). Many of the reports in recent weeks detailing Centrelink’s approach to chasing data matched debts suggest actions at odds with the debt collection guideline.

Centrelink is not however required to comply with the Australian consumer law and the debt collection guideline only applies to government bodies engaged in business activities. In other words, Centrelink is not bound by the rules that apply to every consumer creditor and collection body in Australia – even the much maligned banks.

Centrelink could opt to be bound by incorporating the debt collection guidelines into its service standards or operating procedures. Other industry groups have been doing so for years. Again, the banks attract considerable criticism for poor conduct but have adopted compliance with the debt collection guideline as part of their Code of Banking Practice.

Far better than voluntary adoption, the law could be amended to require compliance for Centrelink and all government collection activities.