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Labor Unveils $300m Plan to Wipe Small Centrelink Debts and Compensate Millions

The move follows a Federal Court finding that income apportionment was unlawful, with legislation due within weeks.

Overview

  • The small‑debt waiver threshold will rise from $200 to $250 for the first time in more than 30 years, a change expected to wipe or prevent about 1.2 million debts this financial year.
  • About 3 million people affected by income apportionment between 2003 and 2020 will be eligible to apply for resolution payments of up to $600.
  • Economic Justice Australia and the Australian Council of Social Service will receive $400,000 each to help recipients navigate the process.
  • July’s Federal Court ruling found the long‑used income apportionment method invalid and confirmed the post‑2020 calculation process is lawful.
  • Greens and advocates welcomed the relief and urged further reforms, including a six‑year limit on debt recovery and full implementation of robodebt royal commission recommendations.