Here’s what the Fair Trading website says:
Where a household is struggling to make rental payments and has suffered a loss of income equal to or greater than 25 per cent due to COVID-19, there is a new obligation to enter into negotiations with their landlord or managing agent, prior to seeking a forced end to the tenancy.
Tenants will be protected from eviction until NCAT is satisfied that negotiations have concluded. Any unpaid rent will accrue as arrears during this period.
So your tenant isn’t squatting, they’re just racking up rent arrears. It would be as much in their interest as yours to negotiate and, if that fails, attend mediation at Fair Trading.
Maybe then they can explain why they signed a lease that they knew they wouldn’t be able to service.