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Tax office rips $200m from returns over claimed Centrelink debts

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The Australian Taxation Office has collected more than $200 million in the past three years from the tax refunds of Centrelink recipients to recoup overpayments.

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The office has also used the process to claw back almost half-a-billion dollars in child care overpayments in that time.

Senior bureaucrats attributed an uptick in debt collections to an increase in notices being issued.

They’ve assured a Senate committee the recovered cash was not just comprised of debts repaid through Centrelink’s deeply flawed “robo-debt” system.

When welfare debts are outstanding, the ATO receives a “red flag” from the department responsible.

“We don’t go behind the debts – we’re told that there’s a debt,” assistant commissioner Jason Lucchese told a Senate committee on Monday.

“Whether it’s lawful is relevant but we will inherently assume that a government agency issues lawful debts.”

The tax office collected 40,000 Centrelink debts equalling $32 million in 2017-18.

This jumped to 74,000 debts the following year, raking in $63 million.

Lucchese said this was because DHS had issued more debts.

The controversial robo-debt system was recently declared unlawful by the Federal Court, with the department telling employees it was effectively scrapping the system.

The Senate committee also heard that Australia’s welfare department can’t confirm how many people may be owed back money from incorrect robo-debt notices.

The department, now known as Services Australia, also doesn’t know how much money it may need to repay.

More than 734,000 people have been overpaid welfare, according to income compliance reviews.

Ros Baxter from Services Australia said “a proportion” of these people would have been ensnared by the flawed income averaging technique of the robo-debt scheme.

The department has assigned 750 staff to manually determine how many people may be owed money.

“We are doing this as quickly as we can,” Baxter told the committee on Monday.

-AAP

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