7.2.1 Debt recovery - general provisions
Summary
This section contains information on the general provisions applying to debt (1.1.D.60) recovery, and discusses:
- how debts can be recovered, and
- no time limit on debt recovery.
How debts can be recovered
A debt owed by an individual (1.1.I.90) or ACO is recoverable by:
- deductions from FTB instalments payable to
- the individual, or
- another consenting individual
- offsetting arrears of FA (1.1.F.02) payable to
- the individual, or
- another consenting individual
- setting off against future child care payments
- cash instalments paid by the individual
- offsetting an income tax refund owed to
- the individual, or
- another consenting individual
- legal proceedings, or
- a garnishee notice (1.1.G.10).
A debt owed by an approved provider (1.1.A.90) is recoverable by:
- setting off against one or more child care service payments that are made
- repayment by instalments under an arrangement entered into
- legal proceedings, or
- a garnishee notice.
Note: FTB top-up payments can be used to offset any FTB, CCS and ACCS debts. CCS or ACCS top-up payments can only be used to offset CCS and ACCS debts.
Act reference: FA(Admin)Act section 82 Methods of recovery, section 82(3)-'debt'
Policy reference: FA Guide 7.2.2 Debt recovery by deduction, 7.2.3 Debt recovery from FA entitlement, 7.2.4 Debt recovery by cash, 7.2.5 Debt recovery from income tax refund, 7.2.6 Debt recovery by legal proceedings, 7.2.7 Debt recovery by garnishee
No time limit on debt recovery
As of 1 January 2017, any action to recover an FA debt can be commenced at any time. The former 6 year statute of limitations no longer applies.
If a debt that was deemed irrecoverable at law prior to 1 January 2017 because the relevant time limit has expired for the recovery of the debt, it cannot be pursued, however, Centrelink can still accept voluntary repayments of the debt.
Even when a debt was deemed irrecoverable at law due to the former statute of limitations, the debt still exists. The debt may be waived where appropriate.
Example: An FTB debt was identified in relation to an individual on 1 January 2005. By 1 January 2011, no action had been taken to recover the debt. As the relevant time limit has expired for the recovery of the debt (6 years) prior to 1 January 2017, the debt cannot be pursued.
Example: An FTB debt was identified in relation to an individual on 1 January 2015. By 1 January 2017, no recovery action had been taken. As the relevant time limit (6 years) has not expired by 1 January 2017, the debt remains recoverable. No further time limits will apply to its recovery.
Act reference: FA(Admin)Act section 93B No time limit on debt recovery action