8.3 Redress payment debt recovery arrangements

Introduction

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 NRSAct also allows for funding contributions or late payment penalties to be recoverable as a debt due to the Commonwealth.

Recovery of amounts

In certain cases, payments made by the Scheme may become a debt due to the Commonwealth.

This includes when:

• an amount was paid to the wrong person or institution
• an amount higher than what was approved was paid to the correct person or institution
• an amount was paid due to fraud or misrepresentation
• 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 a criminal offence
• an amount paid to a person was an advance payment, and the person withdraws their application or declines their offer for redress.

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, that amount may be recovered as 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 an appropriate court.

Arrangement for payment of debt

If a person or institution owes a debt to the Commonwealth because of the Scheme, the Scheme can enter into an arrangement with the person or institution to have the outstanding debt paid. An arrangement takes effect from the date specified in the arrangement.

The Scheme can end an arrangement with 28 days notice. No notice is required if the Scheme is satisfied the person or institution has been untruthful about their ability to pay back the debt. The person or institution can also request to end the arrangement.

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, and require them to pay back the amount owed, or the amount remaining in 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 relating to a redress payment or counselling care services payment to which a participating institution has made a funding contribution. In this case, the Commonwealth must repay the participating institution their share 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.