About a third of $96m ACBF-Youpla victim support scheme to be spent on administration

The maximum amount the federal government is likely to pay to the 13,700 affected Youpla policyholders is $66.6m. Photograph: Youpla

Almost a third of the federal government’s $97m support scheme for the thousands of Aboriginal people who fell victim to the predatory funeral fund insurer ACBF-Youpla will be chewed up by its own administration.

According to documents published on the government’s AusTender site on Thursday, the “maximum” amount it is likely to pay to the 13,700 affected policyholders is $66.6m.

Guardian Australia understands that the rest – about $30m – will go to two of its own departments: the National Indigenous Australians Agency (Niaa) and Services Australia, which is reportedly set to receive $20m to administer the scheme.

ACBF-Youpla collapsed in March 2022, leaving thousands of Aboriginal people, some of them elderly and in palliative care, without the means to pay for funerals. Families had to resort to crowdfunding and some were forced to leave their loved ones’ bodies in morgues while they raised the funds.

In February the Albanese government announced a $97m resolution scheme for those affected. The Youpla support program is due to begin on 1 July and will run for two years. Eligible recipients will have the choice of a funeral bond or a cash payment worth 60% of the value of their policy. Financial counselling will be offered to help them better understand their options.

ACBF-Youpla targeted Indigenous people using marketing materials in the distinctive red, black and yellow colours of the Aboriginal flag, including stuffed toys and colouring books for children, attending community events and by conducting door-to-door sales.

It was investigated by various regulators but it was not until 2018, when its conduct was exposed in the banking royal commission, that its licence to sell new products was withdrawn, paving the way for its eventual financial collapse in 2022.

The revelations come amid growing concerns about Services Australia implementing programs that have exposed Aboriginal people to financial harm.

Guardian Australia has revealed widespread problems with the Centrepay system run by Services Australia, including its continued use by rent-to-buy appliance companies that had previously been sanctioned by the Australian Securities and Investments Commission (Asic) for predatory conduct. Energy company AGL received hundreds of thousands of dollars from welfare recipients using Centrepay, long after they had ceased being customers.

After ACBF-Youpla was allowed to access Centrepay to sign up customers, its profits skyrocketed. Between 1992 and 2001, the company received about $5m in payments. After Centrepay was approved in 2001, it garnered $169m in payments.

Services Australia referred queries to Niaa.

A spokesperson for Niaa said: “The $66.6m will fund resolution payments to be paid to customers as either as a funeral bond or a cash payment.

“The balance of funding is for government agencies to deliver the program, communicate with First Nations people who are eligible for resolution payments and to provide them with financial counselling to explain the funeral bond and resolution payments to help inform people’s decision.”