6.7.1.20 Debts Arising under the SSAct from 1/7/2001

Summary

SSAct section 1223 aims to simplify and outline debt recovery processes and define more clearly what is a recoverable debt.

General provision

SSAct section 1223 describes the categories of debts recoverable under the SSAct.

The provisions of section 1223(1B) operate to define CP overpayments that are NOT recoverable under the SSAct.

Retrospective effect of the SSAct

The current version of section 1223 does not apply where the recipient has an 'accrued right' to have the substantive issues of the matter decided under the provisions of the Social Security Act 1947 or under earlier provisions of the SSAct. An 'accrued right' may arise where a case was already under review at the time of the legislative change.

SSAct section 1223

SSAct section 1223(1) defines debts that are recoverable. If a social security payment is made and a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit the amount of the payment is a debt to the Commonwealth by the person who obtained the benefit of the payment.

The term 'obtains the benefit of the payment' in broad terms means where a social security payment is made and a person's wealth is directly increased as a result, the person has obtained the benefit of the payment.

Section 1223(1AA) ensures that where a payment has been paid to a person who is entitled to the payment (or has been paid to a third party at the request of the person) the person is taken to have obtained the benefit of the payment and no debt can arise if another person obtains the benefit of that payment.

Section 1223(1AA) does not operate to prevent a debt arising that is due to the Commonwealth by the third party under section 1223(1).

Example: Where a person has made a mistake in advising Centrelink to make payments into a particular bank account and the bank details are incorrect then a debt can still arise under section 1223(1).

Section 1223(1AB) sets out some examples where section 1223(1) applies but it does not limit the provisions to those examples.

Examples include:

  • payments made to a person by mistake as a result of a computer or administrative error,
  • payments that were not payable,
  • payments made to a person who was not qualified for the payment, and
  • payments made as a result of a contravention of social security law, a false statement or a misrepresentation.

Section 1223(1AC) provides that debts arising from administrative or computer error are not subject to the determination provisions.

Administrative error, as used in section 1223, is defined as those situations where a person has complied with the provisions of social security law, i.e. provides information to Centrelink which affects the person's qualification for, or rate of, social security payment, and that information is incorrectly or inaccurately processed.

Example: Where a person has earnings of $500 per fortnight (pf) and this information is recorded as $50 pf.

The term computer error is used to describe situations where the operation of a computer program results in a payment, or part of a payment, being made that should not have been made.

Example: Information provided by the child support system is incorrect.

Under section 1223(1AD), section 1223(1AC) will not apply - that is, there will be no debt - if all of the following tests are met:

  • the excess payment arose from an event or change, and
  • the person did not advise of an event or change in circumstances, and
  • there was no valid requirement (notice) for them to provide this information.

This means that, wherever a person did advise the change, or the excess payment did not arise from an event or change, section 1223(1AC) will operate unconstrained by section 1223(1AD) and a debt will exist. In these circumstances, decision makers should ensure they consider any special circumstances or administrative error to determine whether the debt waiver provisions should be applied.

Section 1223(1AE) provides that for debts arising from administrative or computer error, the date of effect provisions are disregarded and that any determination made under SS(Admin)Act section 79 or 80 can be backdated to an earlier date than the day the determination is made.

Act reference: SSAct section 1223 Debts arising from lack of qualification, overpayment etc.

SS(Admin)Act section 79 Rate reduction determination, section 80 Cancellation or suspension determination

Last reviewed: 15 August 2016