Robodebt campaigners and federal MPs have hit out at Services Australia over so-called “vanishing” Centrelink debts, warning they are giving welfare recipients “false hope” and causing confusion and distress.
Welfare recipients have access to a page – called Money You Owe – that outlines any debts they might owe to Services Australia, how much they have paid back and any repayment arrangements that have been reached.
Under the social security system, overpayment debts can happen because people did not declare their income correctly, or because they were not eligible for money they received, though last year the government admitted raising more than $1bn in unlawful debts through the robodebt scandal.
The NotMyDebt group, which helps people challenge welfare overpayments, has reported that some people had recently seen their debts disappear from their Centrelink accounts.
One person who contacted Guardian Australia said they had been battling their debt since 2017.
The person said it has now disappeared from their online record and they later learned it had been “quarantined”.
Social security experts have noted the agency does not explain what this means on its website.
Given the disappearance of the debts comes as the government looks to finalise a robodebt court settlement with a class action led by law firm Gordon Legal on behalf of more than 400,000 people, advocates fear it has led others who are ineligible for a refund to believe their debts have also been wiped.
Services Australia did not rule out that the debts would return to people’s accounts when approached for comment.
The independent senator Rex Patrick said he had several constituents “contact me wondering why their debts have vanished from their MyGov account”.
“Services Australia has advised my office that this is because the debts have been quarantined, but not waived,” he said.
“It’s hugely disrespectful for Services Australia to change the status of someone’s debt, particularly when the change may give people false hope that their debts are cleared, only to find out later that this is not the case.
“Robodebt has caused considerable stress and harm amongst the most vulnerable in our community. Robodebt recipients need to be kept informed and treated with empathy and respect. Sadly Services Australia just doesn’t get it.”
The Greens senator Rachel Siewert said the agency needed to be clear with welfare recipients about what was happening.
“It is not good enough to take a debt out of the system without explanation,” she said. “It is well documented that dealing with Centrelink in regards to debts is incredibly distressing for people on income support.
“Seeing debts disappearing or potentially then reappearing can be incredibly damaging to people’s mental health and wellbeing.”
The debts have been quarantined, but not waived.
It is not known how many people have been affected by the “vanishing” debts, and a Services Australia spokesman did not address the issue.
However, the NotMyDebt group estimated “thousands” of people had been affected.
The group said that it had assisted some recipients to obtain what is known as a “Statement of Debt”, which showed that their disappearing debts had been “quarantined”.
Hank Jongen, a Services Australia spokesman, said the agency had recently quarantined some debts relating to the “Income Compliance class action where the customer is yet to enter into a repayment arrangement”.
“We introduced this temporary quarantine to ensure debt recovery action does not begin while related legal proceedings are ongoing,” he said.
“As a result, these debts may no longer be displayed on Money You Owe, however, they remain on a customer’s record and Statement of Debt.”
Jongen said the majority of class action members were not affected and would not notice a change.
“When a debt is quarantined this stops a range of debt recovery related activities, including interest charges and the debt appearing on recovery letters,” he said. “Anyone who has queries about what they’re seeing in Money You Owe in their Centrelink online account should call us on their regular payment line so our staff can give them information about their individual circumstances.”