Hundreds of thousands of Centrelink payments cancelled illegally, Albanese government admits

The government has admitted it illegally cancelled hundreds of thousands of Centrelink payments because of a glitch in the automated system that runs the controversial mutual obligations scheme, it has been revealed.

Speaking at senate estimates on Wednesday, representatives for the Department of Employment and Workplace Relations said the number of illegal cancellations, where people were not given enough time to reconnect to a job provider after missing a compulsory activity as part of their mutual obligations, was in “the vicinity” of 300,000.

Guardian Australia first reported analysis from the peak body for community legal centres, Economic Justice Australia, last year that showed 310,000 people had their Centrelink payments unlawfully cancelled between 2020 and 2024.

At the time, the department refused to comment, only publicly admitting to unlawfully cancelling 9,510 payments. Payment cancellations have been paused since July 2024 because of this.

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Asked if the department’s analysis on the total number, which has not been public, is similar to the EJA estimate, DEWR’s Bronwyn Field said “EJA used publicly available data” to find out how many payments may have been unlawfully cancelled.

“It is in the vicinity of that,” Field said. “But there are a couple of things that we need to consider and why there’s complexity.

“One of the complexities is people who have gotten a job, so do not need to reconnect.” The number of people who had their payments illegally cancelled when they were eligible (ie out of work) would be “a much smaller cohort”, she said.

Field said the department’s “post monitoring survey” found 55-70% of people who receive a cancellation have lost eligibility because they’ve found paid work above the threshold.

EJA believes that about 20% of the people affected could be eligible for some form of remediation.

Economic Justice Australia chief executive, Kate Allingham, said they raised this with the government over 12 months ago.

“Since we did this analysis, there have been two reports that have highlighted further issues around unlawfulness,” Allingham said.

“We’ve been told by the department, and the minister said in her speech last week that they’re working hard to fix that. We have not seen anything that assures us that that is occurring.”

Allingham said EJA was concerned about the use of automated systems, including in suspensions.

Between January and March, there were 299,305 notices of suspension of welfare payments – which works out to be just over an average of 3,325 each day.