The federal government will end its problematic use of external debt collectors to chase money owed to social welfare departments.
Commonwealth contracts to debt collection agents previously used by Services Australia are set to expire at the end of June and will not be renewed, Government Services Minister Bill Shorten announced this morning.
All future debt recovery will be done in house by Services Australia, Shorten said.
The government’s use of contracted debt collectors was put under the spotlight during this year’s royal commission into robodebt.
The federal government’s disastrous robodebt scheme ran for four-and-a-half years, from July 2015 to November 2019, during which time $1.73 billion in unlawful debts was raised against more than 400,000 people.
Robodebt victims told of being pushed to the brink of suicide after being chased by debt collectors.
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His suicide followed months of being hounded by debt collectors.
Shorten said the Albanese Government would ensure robodebt never happened again.
“The Royal Commission into robodebt has put on full display the unfettered cruelty with which debt collection agencies were unleashed against vulnerable Australians. We cannot let this happen again,” he said.
“We are not naïve to the fact that wherever there is government money, there will be some opportunistic behaviour – but Services Australia is already fully capable of recovering debts and has multiple tools at hand.”
