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9.6 Debt management

The department is committed to improving its debt management processes. The department is required under legislation to manage and pursue the recovery of debts and negotiate suitable payment arrangements for customers based on their capacity to repay their debt.

The most common method of repayment for those receiving social welfare payments is through withholdings from their payment. For people who are no longer receiving a payment, the department offers flexible repayment options, including direct debit, BPAY, telephone or internet banking, Australia Post’s Post Billpay service and the Money You Owe online service.

The Money You Owe online service is a convenient and efficient way for people no longer receiving a payment to repay their debt or set up a payment arrangement. Where a person is finding it difficult to repay a debt, the department can organise a payment arrangement suited to their individual circumstances to ensure they are not placed in serious financial hardship.

A person can request a review of their debt at any time. If they disagree with the review outcome, they have further appeal rights.

Departure Prohibition Orders (DPOs) provide an additional tool for the recovery of social welfare debts and align the powers of debt recovery across child support, tax and social welfare debts. A DPO prevents a person with outstanding social welfare debt from leaving Australia where satisfactory arrangements have not been made to repay the debt. DPOs are only issued after considering other methods of recovery, and in each case the department considers the person’s particular circumstances. If the person then pays their debt in full or negotiates a satisfactory payment arrangement, the DPO is lifted.

Debt recovery

When a person is no longer receiving payments and has failed to make or maintain a payment arrangement, the department may:

  • apply an interest charge on the debt
  • use a contracted external collection agent to recover a debt with commission only paid on the recovered amount
  • garnishee wages, money held in bank accounts or income tax refunds, or
  • issue a DPO.

The department also uses information to locate people who have large outstanding debts and the capacity to pay them. If necessary, the department may take legal action to recover the amounts owed.

As part of the 2015–16 Mid‑Year Economic Fiscal Outlook, the government announced a package of measures under the Enhanced Welfare Payment Integrity initiative. One of these was the Expand Debt Recovery Measure. The measure commenced in March 2016. The aim under the measure was to recover $187 million by June 2019. Over the life of the measure, that recovery target was exceeded. As a result of the success of the measure, it has been extended to the 2021–22 financial year.

In 2018–19, the department raised 2.27 million social welfare debts to the value of $3.4 billion.

Table 53: Debts raised from customers who receive social welfare payments




Number of debts raised




Amount raised

$2.8 billion

$3.2 billion

$3.4 billion

Table 54: Social welfare debt recovered




Total debts recovered

$1.64 billion

$1.70 billion

$1.85 billion

Amount recovered by contracted agents

$126.1 million

$125.7 million

$147.8 million

% of total recovered by contracted agents