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Aussie government to charge interest on welfare debt from false claims

Staff Writer |
The Australian government has threatened to charge interest on more than 900 million Australian dollars ($695 million) of national welfare debt.

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Michael Keenan, Australia's minister for human services, said the Department of Human Services was chasing debt from false claims made over the last 15 years.

The department has started to make contact with people owing money saying they have a month to commit to a repayment plan or be hit with an interest rate of 8.77 percent.

Charging interest on the debt would be an unprecedented move in Australia.

"Some of these debts go back up to 15 years," Keenan told the Australian Broadcasting Corporation (ABC) on Friday.

"But moving forward, it's very important that if you earn money, and you're not doing anything about repaying that money when you have the capacity to repay, then your debt is going to accrue interest and continue to increase."

In one case, the government alleges that a former welfare recipient from Queensland owes 800,000 Australian dollars (617,000 U.S. dollars) for a series of false claims.

Keenan admitted on Friday that the government had been too lenient chasing the debt in the past.

"People just haven't made any effort to repay it, and the Commonwealth has continued to engage with people, reminding them to repay it," he said.

He said criminal charges were a possibility alongside debt recovery in extreme cases.

"If people are deliberately defrauding us, then we will make referrals of that to the police, and they will look at it in conjunction with the Commonwealth Director of Public Prosecutions," Keenan said.

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