Australians with welfare debt to be charged interest

Former welfare recipients with outstanding debts could soon be charged interest on the funds they owe, unless they agree to repay the money.

Approximately 170,000 Australians were overpaid before leaving the welfare system and collectively owe the Federal Government more than $900 million.

Human Services Minister Michael Keenan said the government is cracking down on those guilty of making false claims in a bid to claw back the money owed.


“A lot of people are not making any effort to repay this money, so we are writing to them to let them know they will be charged interest unless they sign up to have a proper repayment plan,” he said.

Mr Keenan said those who receive a notice will have one month to commit to a repayment plan, or they will be slugged with an interest charge — which currently sits at 8.77 per cent.

He told the SBS most of the people who owe money are now working and have the means to start paying back what they owe.

“For those who refuse to take action, interest charges are only the beginning. My department will also look at other measures such as garnishing wages and tax refunds, or referring matters to external collection agents,” he said.