Sarah Witty (Melbourne, Australian Labor Party) Share this | Hansard source

I rise today to contribute to the Social Security and Other Legislation Amendment (Technical Changes No. 2) Bill 2025. With this bill, the Albanese Labor government is delivering a fairer, more efficient and more compassionate social security system.

This bill builds on what Labor have already delivered to strengthen our social safety net. Since we came to government we have raised JobSeeker by almost $4,000 a year, giving people looking for work a better chance to get by. We have lifted the pension by almost $5,000 a year for a single person, giving older Australians more security in retirement. We have boosted rent assistance by almost 15 per cent to help ease the pressure of rising rents, and we are delivering paid parental leave with super so families are almost $12,000 better off for every child.

This bill is another important step in that record. It shows Labor is building a system that helps people when they need it most. One of these changes, which support Australians, is the end of the use of external debt collection agencies. Many of us here are privileged in that we have never had to experience what it feels like to be chased by a debt collector. We have not had to know that gut-wrenching feeling when the phone rings from a private number—not knowing if it's a debt collector, a job offer or a call from your doctor. You live your life gambling on whether someone will leave a voicemail. That constant fear strips people of their dignity as they try to pick themselves up after the safety net has caught them. On top of that is the stress of having to ask for help in the first place and the crushing worry of not knowing how you'll ever pay that back. The last thing people deserve is to be hounded and shamed by a system that is meant to support them.

This legislation reforms how we manage social security debts, resolves the longstanding issue of income apportionment and makes the system work for people instead of against them. For many of us, at some point in our lives, there will be a need to access the social security system. It might be because of illness, the loss of a job, caring for children or older relatives, or simply trying to get through a tough period. It is unfortunate that there have been times when people who have turned to the system in good faith have been left carrying the stress of debts—debts that were small, accidental or calculated under flawed rules, as we have seen with robodebt.

This bill will wipe almost half of Australia's undetermined social security debt backlog and, importantly, will establish a resolution scheme offering payments of up to $600 for those who were impacted by the historical method known as income apportionment. This is fairness in action, this is efficiency in action, and this is Labor putting people back at the heart of government.

One of the most important changes in this bill is the increase in the threshold for waiving small debts. This is the first increase in more than 30 years. The current threshold is just $50, and it has not changed since the 1990s even though government payments have tripled since then. What we considered small in 1993 is not what small means today. By lifting the waiver threshold to $250 we are ensuring Services Australia does not waste time and money chasing debts that cost more to recover than they are worth. Around 1.2 million undetermined debts will be waived or never raised in 2025-26 as a result.

There are two important details about this change. First, the new threshold will not just rise once and then fall behind. For the first time, it will be indexed every year in July with inflation to keep pace with the real cost of living. Second, strong safeguards will remain. If someone tries to game the system by deliberately racking up small debts, those debts will not just be wiped away; this is about fairness, not loopholes.

We must never forget the damage of robodebt. Robodebt was unlawful, it was cruel, and it left hundreds of thousands of Australians carrying debts they did not owe. The royal commission exposed just how badly people were treated. Labor has either accepted or accepted in principle all 56 recommendations of that commission; three-quarters of them are already done or well underway. This bill is part of that work. It makes sure debts are handled properly, with fairness, safeguards and humanity. Unlike those opposite, we will never repeat the mistakes of robodebt.

This change will save resources, but, even more importantly, it will spare Australians who are already doing it tough the significant stress of being hounded over tiny accidental debts. I would like to take a moment to speak about what this means for a woman, and in particular women who have been pushed to the margins. When I was the CEO of the Nappy Collective, I saw up close how families—and overwhelmingly women—were making impossible choices. Women escaping family violence would come to us for nappies because they had nothing left after rent, bills and putting food on the table. I will never forget a mother who told me that, to save money, her only option was to change nappies only for number twos and how receiving a Centrelink debt notice on top of that pressure filled her with fear about how she could ever possibly pay it back. This mother was not irresponsible. She was not careless. She was a survivor, trying to hold her family together with whatever she had. This government, by raising the small debt waiver threshold, is sparing women in these situations the unnecessary trauma of being told they owe their government $50 or $100—sums that might mean nappies for the month or groceries for the week.

This bill also makes critical changes to ensure the social security system cannot be weaponised against victims-survivors of coercion and financial abuse. Financial abuse is one of the most menacing forms of family violence. It strips people of their independence. It traps them in unsafe relationships. Imagine a woman being physically abused by her partner and forced to sign forms she does not understand. Imagine that woman taking the brave but difficult decision to escape that violence, only to be faced with a debt in her name. Her partner's control lingers even after the violence has stopped.

For women from migrant and refugee backgrounds, this can be even harder. What happens if you cannot read English and you are too afraid to ask how the system works? You are left relying on someone who can easily take advantage of you. And what if you're afraid of authority? That fear can silence you and leave you carrying debts that were never really yours. Too many women who came here for safety have found themselves trapped again, this time by debts they never chose and cannot pay. When you do not know how you are going to pay for your groceries, it's very hard to think about making a move to safety. You worry about how you will pay the rent and how you can get the support you need, and in those moments even a small debt can feel like a wall you just cannot get past.

That is why this bill is so important. It means Services Australia will be able to wipe debts that come from coercion or abuse so women and children are not punished for the actions of an abuser. Until now, the system has punished victims of that abuse. With this bill, Services Australia will have the power to waive debt where coercion or abuse played a role. That means no-one will be forced to carry a debt because their abuser manipulated them into signing a form or pressured them into providing false information. This responds directly to the recommendations of the 2024 joint parliamentary inquiry into financial abuse, and it is a critical step under the National Plan to End Violence against Women and Children. This is not just good policy; it's a moral responsibility.

I want to turn to the longstanding issues of income apportionment. From 1991 until 2020, income apportionment was used to calculate debts for people on social security who also earned income from employment. In situations where the exact daily earnings were not clear, income was spread across multiple Centrelink fortnights. We know these practices were inconsistent with the law. While they have never been used by the Albanese Labor government, the fact remains that people were impacted by debt for decades.

The government could attempt to reopen millions of debts, some going back 20 or 30 years, but that would cause untold distress, uncertainty and expense. Many of these debts have been repaid years ago. People have moved on with their lives. Instead we are fixing the law on income apportionment and creating a resolution scheme so people who were affected can be compensated. People with historical debts that happened between 2003 and 2020 will be entitled to a resolution payment of up to $600. If their debt was under $200, they will receive the full amount back; for debts between $200 and $2,000, the payment will be $200; between $2,000 and $5,000, the payment will be $400; and, for debts above $5,000, the payment will be $600. This is a fair and caring way to finally put the issue to rest.

In my electorate of Melbourne, these reforms will make a real difference. Melbourne is a city of creativity, resilience and diversity, but it is also a city where hardship sits alongside wealth. I hear from single parents trying to re-enter the workforce while raising their children. I am reminded of Kathy, a single mum who, like many others, is retraining through TAFE so she can build a more secure future for herself and her children. At the same time, she is holding down casual shifts to make ends meet and to give her kids those small extras that matter so much, like a costume for book week. When working casual hours, income goes up and down, and that can be where debt errors have so often crept in. What should be a step towards stability, studying, working or raising a family can end in an unexpected debt that leaves people with more stress and more uncertainty.

In Carlton and Fitzroy, students juggling study and part-time work tell me how hard it is to keep on top of their obligations when their working hours change without notice. Melbourne has the highest number of people receiving student debt relief through the HECS system, and that is no coincidence. This bill, alongside HECS debt relief, shows the government is serious about removing barriers that hold young people back and about giving them a fair chance to build their future.

I also think of the stories I've heard from migrant support workers of new arrivals trying to get their first job in Australia, often in insecure work like hospitality or cleaning. For them an unexpected Centrelink debt can be overwhelming, especially when they are still learning how our system works and do not have the same networks of support to fall back on. And we know insecure work hits youngest people hardest. The Young Workers Centre in Melbourne has been clear about how casualisation and underemployment leave young workers vulnerable with little financial buffer when mistakes or debt arise. This bill recognises that reality. It acknowledges those struggles, and it changes the system so it supports people instead of punishing them.

Australia deserves a social security system that is fair, efficient and humane—a system that reflects modern realities not outdated thresholds, a system that protects victims-survivors not perpetrators and a system that offers solutions not distress. That is what this bill delivers. In doing so, it shows once again that the government stands with the Australian people who, for whatever reason, rely on social security to live with dignity, security and hope. I commend the bill to the House.

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