If you don’t take action to repay a Centrelink debt

Interest charges

We may charge interest every day after the due date if you either:

haven’t repaid the money
haven’t set up a payment arrangement
don’t have a pause on your repayments
aren’t having amounts deducted from your Centrelink payment.

The interest rate we use is the general interest charge. You can read more about interest charge rates on the Australian Taxation Office website.

Taking money from your tax refund

We can use your tax refund to reduce your debts. We can do this as part of balancing families payments. We call this offsetting and use it to reduce the amount you owe.

In some situations, we can garnish your tax return to pay a debt.

To do this we use a garnishee. A garnishee is where we ask a person, business, or organisation who holds money for you to pay that money to us directly to reduce your debt.

Garnishing a tax refund is different to offsetting that happens as part of the families balancing process.

Garnishing tax refunds from the Australian Taxation Office (ATO)

We’ll only garnish your tax refund to repay a debt if all of the following apply:

you’re not getting a Centrelink payment when you do your tax return
you don’t have a repayment arrangement in place to pay your debt
your debt repayments are not paused.

The ATO will tell us when you have:

an entitlement to a tax refund
available credit from your tax refund.

If we garnish your tax refund, we’ll send you a letter explaining how we’ve recovered the money you owe. It will also appear on your Australian Taxation Office Notice of Assessment as ‘Credit offset to Centrelink’. You’ll be able to see the amount of your tax refund used to pay your debt by requesting a statement of debt.

Garnishing from banks, employers and other organisations

In some situations we may garnish your bank account your income from employment or money owed to you by other organisations.

We’ll only do this if any of the following apply:

you don’t enter a repayment arrangement
you don’t keep your repayment arrangement
you give us misleading information about your ability to repay the debt.

If we take any type of garnishee action, we’ll write to you to let you know.

Withholding money from your Centrelink payment

We can take money from your Centrelink payment to pay a debt you owe us. We call this withholding. We’ll do this if you have not repaid your debt in full by the due date, and haven’t set up a withholding arrangement.

We’ll write to you to explain how much we’re taking from your payment. You can call us on our Debt Recovery Line to discuss further, or if you’re in financial hardship because of your withholding amount.

Departure Prohibition Orders

If you haven’t entered into a payment arrangement or you’re not repaying your debt at a suitable rate, we may issue a Departure Prohibition Order. It’ll stop you from leaving Australia until you either:

pay your debt in full
enter into an acceptable payment arrangement.

We don’t need a court order to stop you from leaving Australia.

External collection agents (ECA)

We stopped referring debts to external collection agents (ECAs) on 1 April 2023.

ECAs are also known as debt collectors.

The ECAs we used were:

Milton Graham, formerly known as Dun and Bradstreet
Probe Operations (Probe)
ARL Collect Pty Ltd (ARL).

Our staff now complete all debt recovery.

If you previously made debt repayments to an ECA, you can set up new repayments to us online.

If your Centrelink online account is linked to myGov, sign in now and select Money you owe.

You can also set up new repayments by using:

the Express Plus Centrelink mobile app
calling the Centrelink debt recovery line.

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