Jodie Belyea (Dunkley, Australian Labor Party) Share this | Hansard source

I rise today in strong support of the Social Security and Other Legislation Amendment (Technical Changes No.2) Bill 2025. It is a long-overdue reform package that will bring greater fairness, clarity and compassion to the way we manage social security debt in Australia. With this bill the Albanese Labor government is delivering on its commitment to create a fairer and more efficient social security system—one that does not punish people unfairly, one that acknowledges past administrative errors and one that recognises the real-world complexities Australians face in their everyday lives. This bill delivers three reforms: it resolves the longstanding issue of income apportionment, it improves debt management through increased small debt waivers and it strengthens protections for victims-survivors through special circumstances debt waivers, particularly in cases of financial abuse and coercive control.

One of the most significant and longstanding issues this bill addresses is income apportionment. Between 1991 and 2020 Services Australia used a method known as income apportionment to determine eligibility and debt levels for income support recipients who also earn wages. When pay slips did not show clear daily earnings, officials distributed that income across multiple Centrelink fortnights to estimate the entitlement. While this approach may have been well intentioned at the time, the full Federal Court's decision in the Chaplin case made it clear that the practice was inconsistent with the legislation as it stood. It was, simply put, legally flawed. The Albanese Labor government has never used income apportionment, but, as the government responsible for restoring integrity to our social security system, we are taking decisive action to correct this legacy issue fairly, transparently and compassionately.

This bill will retrospectively validate the practice of income apportionment, not to conceal past mistakes but to prevent the reopening of millions of old cases, many of which are decades old and already repaid. Recalculating these debts would cause unnecessary distress, create administrative chaos and divert vital resources away from frontline services that Australians rely on today.

To ensure fairness, the bill also establishes the Income Apportionment Resolution Scheme, recognising that some Australians may have repaid debts that were incorrectly calculated and deserve to be compensated. The scheme will cover debts incurred from 1 September 2003 to 6 December 2020, the period when income apportionment was most clearly inconsistent with the law. Affected individuals will be eligible for a resolution payment of up to $600, depending on the size of their debt. Applications are expected to open from January 2026, once this legislation is passed. To assist people through this process, Economic Justice Australia and ACOSS will each receive $400,000 in funding to provide support and guidance.

The scale of this reform cannot be understated. Around 5.5 million debts, held by approximately three million Australians and valued at $4.4 billion, may have been impacted by income apportionment. Because of limitations in historical records, identifying each case individually would be impossible without immense cost and distress. This legislation provides a fair, practical and compassionate way forward, acknowledging the flaws of the past, offering meaningful redress and ensuring legal certainty into the future.

The second major reform in this bill brings long-overdue common sense and fairness to the way we handle small debts. The current small debt waiver threshold, as low as $50, has not changed since the early 1990s. At that time, social security payments were significantly lower. Since then, those payments have tripled in value, yet the definition of 'small debt' has remained frozen in time. This bill will raise the small debt waiver threshold to $250, establishing a single, standardised limit that replaces the current fragmented range of $50 to $200. Importantly, it will also be indexed annually in July in line with the consumer price index, ensuring that the threshold keeps pace with modern economic realities.

This is not just a technical change; it is a reform that will make a real difference in people's lives. In my community of Dunkley, many constituents have shared their experience of being pursued over small but stressful debts—debts that often arose through honest mistakes and cost more to recover than they were worth. This reform will mean that, in 2025-26, around 1.2 million undetermined debts will be waived or never raised. Nearly half of the existing backlog of undetermined debts will be cleared, and public resources will be redirected to supporting people, not chasing trivial amounts.

We are not abandoning fiscal responsibility; we are strengthening it. Existing fraud safeguards remain firmly in place, but we are also recognising that most Australians engage with the social security system in good faith and that small administrative errors should not result in unnecessary hardship. This reform restores proportion, fairness and dignity to the system.

The third reform is the most personally significant for many Australians. This bill strengthens the special circumstances debt waiver, empowering Services Australia to waive debts incurred as a result of financial abuse, coercion or family and domestic violence—an issue that goes to the heart of some of the experiences of many families, women and children in Dunkley.

Before entering parliament, I worked for 15 years in domestic and family violence services with Anglicare and Family Life in south-east Victoria. I met women who could not leave abusive relationships because they were financially trapped. I met women who stayed because they simply did not have the means to support both themselves and their children. Financial abuse and coercive control are not abstract concepts; they are deliberate, devastating forms of manipulation and control designed to trap, punish and disempower.

In many cases, victims-survivors have been forced to provide false information to Services Australia under threat or intimidation. Until now, they were still held responsible for those debts even though the actions were not truly their own. This bill changes that. It empowers decision-makers to consider the full circumstances that led to a person's situation, including whether they were acting under coercion or control.

This reform delivers on our election commitment to embed safety in Commonwealth systems, implements key recommendations from the 2024 for parliamentary inquiry into financial abuse, and supports the National Plan to End Violence against Women and Children 2022-2032. Let me be absolutely clear: victims-survivors should never be held accountable for debts incurred through abuse. This bill enshrines that principle in law. And while this is a major step forward, our work does not end there. The government is continuing to consult on future reforms to ensure that perpetrators, not victims-survivors, are held financially accountable for debts that arise from abuse.

The Social Security and Other Legislation Amendment (Technical Changes No. 2) Bill 2025 is a landmark reform, one that restores fairness, integrity and compassion to our social service security system. It delivers clarity and compensation through the Income Apportionment Resolution Scheme, fairness through a modernised small debt waiver system, and protection and justice for victims-survivors of financial abuse. This bill reflects the values that underpin good government: integrity, fairness, compassion and responsibility. It recognises past mistakes, strengthens future processes and puts people, not bureaucracy, at the heart of social security policy. This is a good policy, it is fair policy and it is the right policy. I commend the bill to the House.

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