8.4 Redress payment debt recovery arrangements
Certain amounts paid under the National Redress Scheme may become a debt due to the Commonwealth. For example, if a redress payment is paid to the wrong person, that payment is a debt due to the Commonwealth and may be recovered under the provisions of the NRSAct.
The Act also allows for funding contribution or late payment penalty due and payable by an institution or a person in relation to the institution to be recoverable as a debt due to the Commonwealth.
Recovery of amounts
In certain cases, payments made by the Scheme may be determined to be a debt due to the Commonwealth.
This includes when:
- an amount was paid to the wrong person or institution
- an amount higher than approved was paid to the correct person or institution
- an amount was paid due to fraud or misrepresentation on behalf of the person or institution receiving the payment, or another person or institution
- an amount was paid to a person who failed to notify the Operator, after making an application for redress, that they had been sentenced to a period of imprisonment for 5 or more years due to an offence against the Commonwealth, state, territory or a foreign country.
Recovery of funding contribution & late payment penalty
If a person or institution is required to provide a funding contribution, or is subject to a late payment penalty, under the provisions of the NRSAct the amount of the contribution or late payment penalty owed under the Scheme is a debt due to the Commonwealth.
Legal proceedings to recover debt
Any debt due to the Commonwealth as a result of the debt recovery provisions outlined in the NRSAct can be recovered by the Commonwealth through a court of competent jurisdiction.
Arrangement for payment of debt
If a person or institution owes a debt to the Commonwealth because of the National Redress Scheme, the Scheme can enter into an arrangement with the person or institution to have the outstanding debt paid. An arrangement takes effect from either the date the arrangement was entered into, or whatever date is specified in the arrangement.
The Scheme can terminate an arrangement with 28 days notice, but no notice is required if the Scheme is satisfied the person or institution has been untruthful about their true capacity to pay back the debt owed. The person or institution can also request the arrangement be terminated.
Recovery of amounts from financial institutions
A payment by the Scheme may be a debt to the Commonwealth if an amount was paid to an account held by a financial institution, and the Scheme determines the amount is not going to the person it was intended for.
The Scheme may provide the financial institution with a written notice explaining the situation including the amount owed, or the amount standing to the credit of the account when the notice is received (whichever is less).
Financial institutions failing to comply with the Scheme's notice are liable for a civil penalty of 300 penalty units. The financial institution does not need to pay this if they can prove they are incapable of complying with the notice (see section 13.4 of the Criminal Code Act 1995 for more information).
If the amount owed by a financial institution is all or part of a debt due to the Commonwealth by a person or institution, any amount recovered from the financial institution reduces the debt accordingly. This does not apply to financial contributions or late payment penalties owed by participating institutions.
Repayment of recovered amount to participating institutions
The Commonwealth may be repaid a debt owed by a person or institution relating to a redress payment or counselling services payment that a participating institution has made a funding contribution towards. In this case, the Commonwealth must repay the participating institution their relevant share of the funding contribution from the amount recovered.
Section 77 of the Public Governance, Performance and Accountability Act 2013 allows the Commonwealth to make repayments to participating institutions in such cases.
Act reference: NRSAct section 167 Recovery of amounts (other than funding contribution and late payment penalty), section 168 Recovery of funding contribution and late payment penalty, section 169 Legal proceedings to recover debt, section 170 Arrangement for payment of debt, section 171 Recovery of amounts from financial institutions, section 172 Repayment of recovered amount to participating institutions