High Court to consider lawfulness of millions of historic debts raised by Centrelink

Matthew Chaplin, represented by Victoria Legal Aid, is appealing a Federal Court decision regarding a debt originally raised against him by Centrelink using a method known as income apportionment.

The method involves employment income being averaged out across the days in two or more Centrelink payment periods, even if it wasn’t earned on those days.

For over two decades Services Australia used this method to calculate people’s income – and raise Centrelink debts. Services Australia raised up to $4.4 billion in debts potentially impacted by income apportionment, affecting up to three million Australians.

The historical use of income apportionment is now generally understood to be unlawful. The outstanding question for the High Court is whether an alternative method to income apportionment was available.

With the federal government passing laws in November 2025 to retrospectively validate income apportionment-related debts and provide for compensation, Mr Chaplin’s case will determine how these debts could lawfully have been raised at the time.

Acting Executive Director Legal Practice, Civil Justice and Legal Help Lucy Adams said:

‘Not only does this High Court case potentially impact over 3 million people who may have received debts impacted by income apportionment, but it is critical in determining how Services Australia can raise debts into the future.’

Matthew Chaplin said:

‘When I received my first debt notice, I challenged it because of the money. Now it’s about trying to fix the system. I’m taking my case to the High Court because it’s not just about me anymore. It’s about all the other people who’ve been hit with Centrelink debts and aren’t in a position to take them to court or challenge them.’

Associate Director Economic and Social Rights Sam Sowerwine said:

‘We all deserve a social security system that has our backs when we need it, that makes decisions we can depend on and that doesn’t require people to disprove debts that should not have been raised in the first place.’