The government has admitted that a glitch in the automated system behind the mutual obligations scheme illegally cancelled hundreds of thousands of Centrelink payments, a far wider problem than it had publicly acknowledged before Wednesday’s senate estimates hearing.

Officials from the Department of Employment and Workplace Relations told estimates the number of unlawful cancellations was in the vicinity of 300,000, with Bronwyn Field saying Economic Justice Australia had used publicly available data to reach that figure. She said the group’s own assessment put the number at 310,000 people whose Centrelink payments were unlawfully cancelled between 2020 and 2024.

The search for answers is running hot because the department had previously admitted only 9,510 unlawful cancellations, yet the scale discussed this week suggests the real harm may be far larger. Payment cancellations have been paused since July 2024, but the new disclosure raises a basic question about how many people were hit by the automated process before it was stopped.

Field said the department’s post monitoring survey suggested 55% to 70% of people who receive a cancellation have lost eligibility because they have found paid work above the threshold. That leaves a smaller pool for remediation, and Economic Justice Australia believes about 20% of those affected could qualify for some form of fix. Even so, the gap between the public admission and the estimate is striking: the department has owned up to 9,510 cancellations, while the estimate discussed at estimates points to something closer to 300,000.

Kate Allingham said the issue was raised with the government more than 12 months ago, and that the group has since seen reports highlighting further unlawfulness. She said the department and the minister had said they were working hard to fix the problem, but that she had not seen anything that assured her that was happening. Allingham also said there were concerns that discretion was not being applied when it should be.

That concern is sharpened by fresh suspension figures. Between January and March, there were 299,305 notices of suspension of welfare payments, an average of just over 3,325 each day. The numbers do not prove each notice was unlawful, but they show the automated system was still moving at scale even after payment cancellations were paused.

The unresolved issue now is not whether the system failed. It did. The question is how many people will actually be put back in the position they should have been in, and how long it will take the department to sort out the damage from a process that was supposed to police compliance, not strip payments illegally.