A new data matching initiative between Centrelink and the Australian Taxation Office is expected to claw back millions of dollars from welfare recipients who have debts with the Australian Government.

 

Minister for Human Services Tanya Plibersek said the new initiative will enhance Centrelink’s debt recovery ability and is expected to recover more than $71 million over four years.

 

Beginning on July 1 this year, Centrelink and the ATO will automatically match data on a daily basis as a way of cross-checking former welfare recipients who have a debt with the Commonwealth.

 

Those who are identified as having debts and who haven't made repayment arrangements with Centrelink may have their tax refunds garnisheed when they lodge their income tax return.

 

"The Government prefers to work with people and provide them with flexible debt repayment options, rather than having to garnishee their tax refunds," said Ms Plibersek. "But if people fail to come to an arrangement to settle their debts, the Government has a responsibility to taxpayers to recover that money."

 

Ms Plibersek said Centrelink customers sometimes incurred a debt with the Commonwealth because they either inadvertently or intentionally claimed a benefit they were not entitled to.

 

Assistant Treasurer Bill Shorten said the tax garnishee process had been carried out manually once a year for the past 15 years and involved a significant amount time on the part of the departmental officers.

 

"The automation of this process will free up resources and result in more people being referred to the tax garnishee process, retrieving more outstanding debt on behalf of taxpayers," he said.

 

He said more than $27.5 million was recovered from over 43,000 former Centrelink customers' tax refunds in the 2009/10 financial year through the tax garnishee process.

 

"The new data matching link is expected to increase the number of former customers identified for this process by an additional 65,000, above current detection levels, over the four years."

 

Mr Shorten said under the new initiative people experiencing financial hardship will continue to have the opportunity to enter into an alternative repayment arrangement.

 

Centrelink is currently writing to over 90,000 people with outstanding debts who are not currently receiving a payment from Centrelink or the Family Assistance Office.