A new data matching initiative between Centrelink and the ATO is expected to claw back millions of dollars from welfare recipients who have debts with the Australian Government.
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.
The new initiative is expected to recover more than $71 million over four years.
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.
Of course, this is nothing new in itself. 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.
Apparently this process has been handled manually every year for the past 15 years, involving a significant amount time and people-power. The process will now be automated and, according to Assistant Treasurer, Bill Shorten, will “result in more people being referred to the tax garnishee process, retrieving more outstanding debt on behalf of taxpayers.”
Mr Shorten said “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.”
Centrelink is currently writing to over 90,000 people with outstanding debts who aren’t currently receiving a payment from Centrelink or the Family Assistance Office.
To avoid losing a tax refund because of an old debt, people are advised to contact Centrelink to set up a repayment plan. Details on how to do this are in the letter or people can contact Centrelink on 13 6330.