4.3.1.40 Payment of Arrears - Financial Hardship

Summary

Administrative guidelines require requests for revocation of any delivery method, in the first instance, to be applied prospectively.

However, arrears may be paid upon the individual's request only in circumstances where financial hardship has been proven. Each request for payment of arrears should be assessed on an individual basis. In such circumstances arrears cannot be paid without a prior determination that hardship exists.

Centrelink will conduct individual assessments in order to consider the individual's financial circumstances at the time of the request and the availability of funds needed to cover exceptional expenses. For arrears to be paid, an individual must provide a reasonable explanation supporting the fact that financial hardship would result if payment of arrears was not granted.

The expectation is that the delegate would be able to make the determination of financial hardship on the basis of information provided by the individual over the phone and that documentation would not be required.

Example: A family have just had their first child and are uncertain what their income will be for this income year. Rather than take the risk of receiving an overpayment they elect to receive the base rate of FTB Part A and wait until the end of the income year to receive any additional FTB Part A they may be entitled to. Part way through the year the family's income stabilises and they decide to revoke their choice, as the risk of an overpayment is now minimal. However, due to unforeseen medical expenses relating to the child, the family also ask for arrears of FTB Part A to be paid. Centrelink assess the family's income and expenses and determines that the family could not reasonably meet their medical expenses and would experience considerable financial hardship if arrears were not paid. Centrelink will determine the family's entitlement to FTB Part A based on their estimated family income and pay the difference between the entitlement and what they have already received.

Last reviewed: 20 September 2016