Minister for Social Services, Tanya Plibersek, has today announced a simple change to the wording of the social security law that will make a profound difference to the lives of people who would otherwise be saddled with debt due to actions of a perpetrator of family and domestic violence. The announcement has been made jointly with Senator the Hon. Katy Gallagher. This particular change to special circumstances debt waiver provisions is something Economic Justice Australia (EJA) has been advocating for for many years, and we wholeheartedly welcome the Minister’s action on this simple but critical piece of reform.
Under current legislation, a social security debt can be waived where there are ‘special circumstances’ that are unusual, uncommon or exceptional, and where it is considered unfair or unduly harsh for the person to have to repay the debt.
However, the impacts of family and domestic violence, and particularly coercive control, were not within the purview of Parliament when special circumstances debt waiver provisions were introduced. Prior to the reform announced by Minister Plibersek today, special circumstances waiver provisions did not apply when a person receiving social security payments ‘knowingly made a false or misleading statement or failed to comply with an obligation under social security law’ (s1237AAD, Social Security Act) – even if that information was provided as the result of threat, coercion or violence.
EJA Member Centres – community legal centres who provide specialist social security legal advice – have seen many instances of significant debts that have come about as a result of family and domestic violence, but which remained valid under the social security law due to this significant blind spot in the provisions. Several recent EJA Member Centre case studies are included in the pages below.
Thanks to the Minister’s reform, such debts arising from threat, coercion or violence will now no longer be valid under the social security law, giving victim-survivors of family and domestic violence access to justice – and a better chance of escaping abusive circumstances.
“While the special circumstances debt waiver provisions are an important safeguard within social security law, the devastating impact the word ‘knowingly’ has had on victim-survivors of family and domestic violence is a shocking example of how one word within a piece of legislation can, genuinely, ruin lives,” says EJA CEO Kate Allingham.
“This one word – ‘knowingly’ – has enabled perpetrators to easily weaponise legislation to inflict financial abuse, often meaning debts in the tens of thousands of dollars, on the people they are targeting, who are usually women and children. Debts are crippling at the best of times, but this has made an incredibly difficult situation – fleeing family violence – even more devastating. People have had their measly social security payments further reduced to repay these debts, taking food off the table and adding significant financial pressure on families. It also means that people are unable to access advance payment and other payments within the system that are not available to people with a debt.
“This change to the legislation is a no-brainer, and will result in a much fairer outcome for people in incredibly vulnerable and distressing situations.
“We sincerely thank Minister Plibersek and Senator Gallagher for actioning these critical changes to the legislation, and look forward to seeing what this means for the rest of her time as Minister for Social Security.”
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Media contact: Kirsty Sier | 0435 075 085 | kirsty@ejaustralia.org.au
Related resource: Poverty or safety – Legislative brief 2024 (EJA)
Recent EJA member centre cases
Fatima – ‘Knowingly’ creates legal uncertainty, leaving victim/survivor homeless
Fatima (not her real name) is a refugee experiencing significant mental ill health and homelessness after leaving her violent husband.
When Fatima left her husband, she notified Centrelink that she was no longer in a relationship and that she now had only two of her four children in her care as the father insisted that the older children remain with him. Centrelink updated Fatima’s income support records and she started receiving her income support payment at the single rate. Centrelink did not update Fatima’s Family Tax Benefit records and she continued to receive Family Tax Benefit for all four children.
Fatima’s husband remained controlling and abusive, refusing to let her two oldest children return to live with her. She wasn’t sure why she was still receiving Family Tax Benefit for all four children but knew her husband needed additional financial support to care for her older children, so she transferred half the Family Tax Benefit she received each fortnight to him.
After some months Centrelink corrected the error on their system, and back paid her husband the amount he should have received for the period he’d had the older children in his care. Centrelink also raised a debt against Fatima for the Family Tax Benefit she had received for her older children. Fatima was not able to recover any of the money she had given her abusive husband.
Centrelink started recovering the debt from Fatima at a rate of $120 per fortnight. Centrelink also withheld the FTB supplement Fatima had been due, and put it towards the debt. She had been relying on those funds to pay a number of the expenses she’d incurred leaving her husband and establishing a safe home for herself and her children. She found both the loss of her FTB supplement and her reduced fortnightly income extremely difficult to manage. She became homeless.
Fatima tried to explain her situation to Centrelink but her review was unsuccessful. She found an EJA member centre, which agreed to represent her. Her caseworker spent considerable time and effort collecting evidence and mounting an argument, while letting her know her case was undermined by her awareness she was receiving payment for four children. After many distressing months, her case was heard by the Administrative Appeals Tribunal, and her debt was waived.
Fatima’s case is an example of the legal uncertainty resulting from the ‘knowingly’ provision, and terrible toll that uncertainty can take on a victim/survivor of domestic violence who remains subject to her husband’s abuse.
Kristy – ‘Another person’ knowingly making a false statement
Kristy (not her real name) approached an EJA member centre after receiving a letter telling her she had a $50,000 Centrelink debt. She also had numerous other debts to different creditors. All of these debts had been incurred by her violent ex-partner, who controlled all of her finances and had set himself up as her Centrelink nominee. He had purposely reported incorrect income to Centrelink in relation to Kristy’s payments to receive a higher rate of Family Tax Benefit for their children. He had also taken out a car loan for $40,000 in Kristy’s name, then sold the car and kept the cash.
Kristy’s ex-partner had no property because he spent all money he came into on drugs and alcohol. This meant Kristy could not use family law processes to try hold her partner liable for the Centrelink debt or any of the other debts. Centrelink’s special circumstances waiver, ‘knowingly’ provisions, prevented Kristy from accessing debt waiver because her partner had purposely lied to Centrelink.
The EJA member centre assisted Kristy with her debts, including the $40,000 car loan, which they were able to have waived in its entirety under the bank’s family violence provisions. The same could not be achieved for the Family Tax Benefit debt given the ‘knowingly’ provisions in the Social Security Act. Kristy remained liable for the full $50,000 social security debt.