Centrelink debt can be a significant source of stress, particularly for single mothers already managing the rising costs of housing, food, childcare and raising children on one income.
Recent changes to Centrelink debt rules include a higher threshold for small debts to be automatically waived, as well as broader consideration of the circumstances that may have contributed to a debt.
Small debts under $250 can now be waived
Centrelink debts of less than $250 will now be automatically waived when the debt decision is or has been made from 20 March 2026 onwards.
The threshold will also be indexed annually in line with the Consumer Price Index (CPI), so it can keep pace with changes in the cost of living.
If a debt meets the criteria, it won’t need to be repaid and the waiver will happen automatically, there is no need to apply.
Importantly, the new threshold does not apply retrospectively. Debts raised before 20 March 2026 still need to be repaid.
More consideration for people experiencing difficult circumstances
The rules around special circumstances waivers have also been expanded.
This is particularly important for people who may have provided incorrect information to Centrelink while experiencing circumstances that made it difficult to manage their affairs.
When considering whether a debt should be waived, Services Australia can now take a person’s broader circumstances into account, including whether they gave incorrect information because they were experiencing:
- family and domestic violence
- homelessness
- mental health difficulties
- a natural disaster
- serious addiction
- other significant life pressures.
This recognises that mistakes or incorrect information don’t always happen because someone has deliberately done the wrong thing. Sometimes they occur when a person is dealing with circumstances that make it difficult to navigate an already complicated system.
What if you’ve already paid the debt?
The changes can also apply to older debts that have already been repaid.
If Services Australia decides that a debt should be waived, any amount already paid may be refunded, or it may be applied to another outstanding debt.
For single mothers who have received a Centrelink debt, particularly during a period of family violence, homelessness or other significant hardship, these changes are worth understanding.
You can find more information about Centrelink debts and the circumstances in which help may be available through Services Australia.
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