11.1.10.30 Repayment of money credited to an income management account

Repayment of income management funds held by a third party

Where an amount is debited from a person's income management account to credit an account held with a contracted third party (such as an account held with a local community store), any amount that has not been spent by the account holder may be required to be repaid by the third party to the Commonwealth. If the account holder can no longer acquire goods or services through an account held with the contracted third party, e.g. if the store has ceased trading, the account holder may request the amount be repaid.

To initiate recovery, Centrelink will contact the third party, requesting the third party repay the amount. If the third party does not respond to the request for repayment within a reasonable timeframe, (generally within 28 days) Centrelink will raise the amount as a debt due to the Commonwealth by sending a written notice to the third party. If the account holder is in financial hardship, Centrelink may raise the debt due to the Commonwealth as soon as possible.

Once a debt to the Commonwealth has been raised against the third party, Centrelink will credit the account holder's income management account with an amount equal to the amount of the debt.

Example: Jerry is income managed. He moves to another community. Jerry has an amount allocated to a local store in the community where he used to live. As he can no longer purchase goods from that store, Centrelink requires the store to repay the amount that remains in Jerry's store account. Centrelink will send a letter to the store requesting the store repay the amount held in Jerry's store account. If Jerry is in hardship, Centrelink will raise a debt for the amount against the store, and re-credit the amount to Jerry's income management account. If Jerry is not in hardship, Centrelink will credit Jerry's account once the store returns the funds. Should the store not return the funds within a reasonable timeframe, generally 28 days, Centrelink will raise a debt against the store and re-credit Jerry's income management account.

Act reference: SS(Admin)Act section 123ZH Repayment of money credited to an account

Breach relating to the crediting of an income management account

Where an amount is debited from a person's income management account to credit an account held with a contracted third party, for example a local community store, and the third party has breached a condition of the payment to that account, any amount that has not been spent by the account holder is a debt due to the Commonwealth.

Once a debt to the Commonwealth has been raised against the third party, Centrelink will credit the account holder's income management account with an amount equal to the amount of the debt.

Example: Centrelink sends $100 from Olivia's income management account to a local community store that has an income management agreement with Centrelink, but the store records the amount sent as only $10. This is a breach by the third party (the store) and Centrelink may raise a debt against the store for the $90 not credited to Olivia's store account, and re-credit it to her income management account. Alternatively the store may correct its records and credit the $90 to Olivia's store account.

Act reference: SS(Admin)Act section 123ZI Breach of condition relating to crediting of account

A person's income management accounts credited in error

Where an amount is credited to a person's income management account in error, the Secretary may determine that the person's income management account be debited by an amount or may instead raise a debt of an amount equal to the excess amount. The error must have been made in the process of income managing a person's payments under SS(Admin)Act Part 3B.

If debiting the full amount from a person's income management account in one lump sum might place them into hardship, the debits may be made in instalments, with each instalment at least equal to the amount that would be withheld if the amount had been raised as a debt.

Examples of where an amount would be credited in error include when:

  • funds are credited to the wrong person's income management account
  • an incorrect proportion of a person's social security benefit is sent to the income management account, or
  • where a person on income management has died and money has continued to accumulate in his or her income management account, as the person would cease to be subject to income management from the time of their death.

Act reference: SS(Admin)Act section 123YR Credit of income management account in error

Last reviewed: 11 November 2019