6.7.2.30 Debt recovery by deductions

Summary

This topic discusses debt recovery by way of deductions from the debtor's social security payment.

When debts may be made

Debts may be recovered by deductions from the debtor's social security payments unless it has been waived or written off or is being recovered in some other way.

Deductions can also be made from the social security payments of a person other than the debtor, with their consent.

Deductions may be made to repay a debt under any of the acts and schemes set out in SSAct section 1231.

Debts that may be repaid by way of deductions from social security payments include:

  • debts under the SSAct
  • debts under the Social Security Act 1947
  • debts under the Farm Household Support Act 1992 section 56 in respect of an amount of exceptional circumstances relief payment or farm help income support
  • debts relating to a payment of pension or allowance under the VEA
  • debts relating to a payment of family assistance within the meaning of the FAAct
  • debts relating to a payment of compensation (within the meaning of the MRCA) under that Act
  • debts relating to a payment of pension or allowance under the Seamen's War Pensions and Allowances Act 1940
  • debts relating to a payment under
    • the Austudy Scheme, being the scheme under the Student Assistance Act 1973 Part 2 as previously in force, or
    • the ABSTUDY Schooling Scheme, or
    • the ABSTUDY Tertiary Scheme (to the extent that it applies to full-time students), or
    • the AIC Scheme, or
    • the Veterans' Children Education Scheme, or
    • the Post-Graduate Awards Scheme, or
    • the Adult Migrant Education Program Living Allowance, or
    • the Maintenance Allowance for Refugees, or
    • the ESL Allowance (to the extent that it applies to full-time students)
  • if the amount was paid to the person on or after 12 August 1988, debts relating to a program included in the programs known as LMP
  • debts that are a 'student assistance overpayment' in the Student Assistance Act 1973 subsection 3(1)
  • debts under the Child Support (Registration and Collection) Act 1988 section 79, and
  • debts under the Data-Matching Program (Assistance and Tax) Act 1990 subsection 11(6).

Amount of deduction

The amount of the deduction will be determined by the Secretary. In determining the amount of the deduction, the debtor's financial circumstances must be considered in some detail to determine an appropriate rate of recovery.

Payment of arrears or a pension bonus, can be deducted in full towards a debt. However, other payment types cannot be reduced to nil without the debtor's permission. A determination to reduce any payment to nil cannot be made if the deduction would leave the debtor in severe financial hardship.

The amount of the deduction can be varied at the Secretary's discretion, for example, where there is a change in the debtor's financial circumstance.

Act reference: SSAct section 1231 Deductions from debtor's pension, benefit or allowance, section 1234A Deductions by consent from social security payment of person who is not a debtor

SSAct pre-1 July 2014 section 1231A Deductions from debtor's farm household payments or support

Last reviewed: 20 September 2019