Centrelink Debts

Centrelink can demand repayment of an overpayment of benefits. It doesn’t matter whether the overpayment was your fault; they can demand repayment of any money that you weren’t entitled to.

But, remember, Centrelink may have made a mistake, so you should check to make sure.

If you’re trying to figure out whether you owe Centrelink money or how to negotiate a repayment arrangement, follow these steps.

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Sort out your Centrelink debt with these steps


Check that you owe Centrelink money

Just because Centrelink/Family Assistance Office (FAO) says you have been overpaid doesn’t mean they are right. Sometimes they might act on the wrong information or incorrectly interpret the law.

You’re entitled to ask for the details of:

  • what they’ve paid you each fortnight
  • what they say you were entitled to for the same period.

You may need to make an application under Freedom of Information law to get this information so you can check the facts relating to the period of the debt. You can use the Freedom of Information request form available on the Centrelink website to do this.

Once you have these details, get free and independent legal advice from a specialist service about what you can do if you dispute that you owe some or all of the debt. To find your nearest service, check Economic Justice Australia.


Make a repayment arrangement

You may have received a letter from Centrelink demanding payment of the debt within a few weeks. Don’t panic.  You can ask for a repayment arrangement if you can’t afford to repay the money immediately.

Disputing a debt and appealing a Centrelink decision can take a long time.  So even if you disagree with the debt, and you intend to dispute it, or ask for it to be waived, it is best to make a repayment arrangement otherwise Centrelink may:

  • Charge you Interest on the debt.
  • Withhold an amount (a standard percentage) from your Centrelink payments.
  • Recover the debt by garnishee from your Income, bank account or tax return.
  • Refer your debt to a private debt collection agency.

Entering into a repayment arrangement does not prevent you from appealing the debt.  If it is later found you do not owe the debt or it is waived then you will get your repayments back.

Here’s what to do:

a. Work out what you can afford to pay

  1. Add up your income
  2. Add up all of your expenses
  3. Subtract your expenses from you income

Find out more about working out what you can afford to pay.

b. Negotiate a payment plan with Centrelink

Ask for a payment plan. When you enter into a payment plan, you will be able to negotiate a repayment amount that you can afford and that will not cause you financial hardship.

  • If you’re still receiving Centrelink, this amount may be deducted from future payments.
  • You should contact Centrelink every 13 weeks to let them know that you want to continue repaying the debt at the negotiated amount. If you don’t contact Centrelink, your repayment may increase to the automatic higher amount. At the moment the automatic rate is 15% but can be higher for some types of payments.
  • If you’re no longer receiving Centrelink it’s important you start making the payments you can afford straight away.


  • Centrelink’s phone lines are open Monday to Friday from 8am to 5pm local time. The Family Assistance Office is open from 8am to 8pm local time
  • Waiting times are usually shortest early in the morning or on Wednesdays and Thursdays
  • Stay on the line – hanging up and redialling may mean a longer wait than staying on the line
  • Keep records of your payments so you know what you owe or what Centrelink owes you


Get specialist advice about your Centrelink debt

Centrelink is not always right when it says someone has a debt, and even if the debt is correct there may be reasons why it would be unfair for them to recover it.

You can dispute the debt or ask for a waiver of the debt, and appeal to an independent tribunal if Centrelink will not change or remove the debt. However, there can be risks involved in appealing Centrelink debts.  Centrelink may do more investigations and review the period of the debt and the amount of the debt.  Your debt may decrease but it could also increase.

 Get free and independent legal advice from a specialist service before disputing a Centrelink debt or asking for it to be waived.   To find your nearest service, check Economic Justice Australia.


If you don’t believe you owe Centrelink money or you think your debt should be waived you have the option to:

  1. Ask Centrelink for the debt to be reviewed by an Authorised Review Officer
  • Having a debt reviewed is simple and free, and some people are successful at this level.
  • You can ask for an Authorised Review Officer (ARO) in writing or over the phone.
  • The ARO is a senior officer at Centrelink who has the power to change the original decision.

The ARO will only waive the debt in limited circumstances, which are if:

  • the debt arose solely because of a Centrelink error, and you received the payments in good faith); and/or
  • there are special circumstances (such as severe financial hardship, poor health or high medical costs) and you did not knowingly make any false or misleading statements to Centrelink.  It may be useful to ask your doctor, counsellor or community caseworker, if you have one, to provide reports to help explain your circumstances.

If Centrelink refuse to change or waive your debt, you can appeal that decision (see Step 2 below).

  1. Appeal to the Administrative Appeals Tribunal
  • If you think the ARO has made a wrong decision, you can appeal to the Administrative Appeals Tribunal(AAT), a body that is independent of Centrelink. There are two review processes available in the AAT. You also have further appeal rights to the Federal Court.

Get free and independent legal advice from a specialist service BEFORE asking Centrelink to change or waive the debt or appealing against a Centrelink decision.   To find your nearest service, check Economic Justice Australia.


Speak to one of our financial counsellors

If you’re feeling overwhelmed and need some help to deal with your financial hardship, you can speak with one of our financial counsellors.

Financial counsellors aren’t judgmental about your circumstances – they’re here to offer you free, confidential and independent advice and assistance.

To speak to a financial counsellor you can:

  • Call the National Debt Helpline on 1800 007 007 – open Weekdays from 9:30 am to 4:30 pm.
  • Use our live chat service by clicking the chat icon in the bottom right corner of your screen. Live chat is available 9:00 am to 8.00 pm weekdays. If you send a message outside these hours a financial counsellor will get back to you.
  • Make an appointment to see a financial counsellor in your local area – Find a local Financial Counsellor.

What happens if?

Centrelink thinks the overpayment is due to fraud

If Centrelink thinks the overpayment is due to fraud, they may ask you to come in for an interview and they may prosecute you for a criminal offence. Get legal advice immediately.

If you need help speak to one of our financial counsellors by calling 1800 007 007.

I don't pay my Centrelink debt

If you don’t make an arrangement to pay, Centrelink can take up to 15% of your pension or benefit to repay your debt, can apply interest to your debt, and may refer your debt to debt collectors.