Millions of Centrelink customers have three months left to apply for compensation over debts calculated using an unlawful income apportionment method, with the scheme closing on January 29, 2027.
The Income Apportionment Resolution Scheme provides one-off payments of up to $600, with the amount increasing according to the value of the debt. Customers with eligible debts below $200 will receive compensation equal to the full amount owed.
However, recipients will still be required to repay the debts. Anyone who has not applied by February 2027 will miss out on compensation while retaining the debt recorded against their name.
Centrelink income apportionment debts
The scheme follows a Federal Court ruling that Centrelink had acted unlawfully by assuming a recipient’s income fell within particular fortnightly reporting periods, even when their pay dates did not match those periods.
Social Services Minister Tanya Plibersek described the issue as “a genuine misinterpretation of the law”. The debts were placed on hold during court proceedings before legislation was passed to retrospectively validate the use of income apportionment and the affected debts.
Services Australia said customers would be contacted 28 days before repayments were due to restart. The agency stressed that the debts had already been raised and communicated to customers before the pause, and were not new debts.
Income apportionment was used from the early 1990s until 2020. Services Australia is restoring only debts generated from 2003 onwards, although some may have been raised as late as December 2025.
The method is separate from the increase in the debt waiver threshold, under which new debts below $250 can be wiped. Customers whose income apportionment debt has already been fully waived are not eligible for compensation for that debt.
Those with more than one eligible debt can apply for a separate Resolution Scheme payment for each one.
How income apportionment differs from Robodebt
Services Australia said income apportionment debts should not be confused with the separate Robodebt scheme. The agency said the debts were calculated using earnings information provided by customers, rather than averaged income data from the Australian Taxation Office.
The compensation scheme for victims of the Robodebt scheme closed in March.
Customers concerned about repayments can contact the debt recovery line on 1800 076 072 to discuss an arrangement. Services Australia said people who believe a debt is incorrect, or who disagree with it, can request an explanation or review.
The agency also urged anyone experiencing financial hardship, or who had experienced it previously, to make this known so their circumstances could be considered when reviewing the debt and available options.
