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The past 2 months we've received a number of questions about retaining Centrelink payments to pay a debt.
The Centrelink code of operation position is clear that the default position is the most that may be retained is 10%, and this ONLY applies to debts that are overdrawn savings accounts.
You can read the full code here.
A copy of the purpose of the code is pasted below for your benefit (current as at September 2015)
All parties recognise that the Australian Government provides payments to customers to ensure they are able to provide basic food and accommodation for themselves and their families. The aim of this Code is to ensure that recipients of income support payments and DVA payments have sufficient income to maintain adequate food and shelter. Participating ADIs agree that they will take this into account when considering the amount they should recover each fortnight for the repayment of the debt.
All parties also recognise that not all customers:
Under this Code, the default position is that a customer should be able to retain at least 90 per cent of their income support payment or DVA payments in any fortnightly period. However, nothing in this Code prevents either:
For clarity, where the ADI is unable to contact the customer about the debt, the maximum repayment amount that may be deducted from the customer’s fortnightly payment will be the amount equal to 10 per cent of that fortnightly payment.
A customer is able to request that their ADI reviews the repayment amounts should the customer's circumstances change.
Source: Centrelink Code of Operation