7.3.7 Departure prohibition orders
From 1 January 2017, the Secretary can make a DPO, preventing a person with a debt to the Commonwealth under this Act from leaving Australia.
Making a DPO
The Secretary has the discretion to make a DPO in a case where all 3 conditions below are satisfied:
- the relevant person has one or more outstanding PLP, DAPP, family assistance or social security debts, and
- they have not made satisfactory arrangements to wholly discharge their debts, and
- the Secretary believes it is desirable to make such an order to ensure that they do not leave Australia without wholly repaying their debts or making satisfactory arrangements to do so.
Before making an order, the Secretary must also take the following matters into account:
- the person's capacity to pay debt/s,
- whether any debt recovery action has been taken and the outcome of the recovery action,
- the length of time the debt/s have remained unpaid (after the day on which it became due and payable), and
- any other matters as the Secretary considers appropriate.
What constitutes a satisfactory repayment arrangement will depend on the facts of the case.
The Secretary cannot make a DPO unless all of these conditions are satisfied. Furthermore, as a DPO places significant restrictions on the debtor's freedom of movement, the Secretary will not make a DPO without considering all the relevant circumstances.
Note: A DPO cannot be made where there is a PPL funding amount debt owned by an employer.
Act reference: PPLAct section 200A Secretary may make departure prohibition orders, section 168 PPL funding amount debts-amounts not paid as PLP instalments.
Secretary believes it is desirable to make a DPO
The purpose of a DPO is to secure payment of a person's debt owed to the Commonwealth. As such, the Secretary will not make a DPO unless there are grounds for the reasonable belief that making the order will make recovery of the debt more likely.
Situations where a DPO may be appropriate include:
- The debtor is about to leave Australia - regardless of any plans to return.
- The debtor is transferring assets offshore, either directly or indirectly (e.g. borrowing funds overseas by securing Australian assets).
- The debtor has resources, whether financial or otherwise, that would enable them to live offshore, such as family, assets, employment or a business.
Departure from Australia prohibited
A DPO made against a person will prevent them from leaving Australia before either discharging all their debts or making satisfactory arrangements to do so.
A DPO places significant restrictions on the freedom of movement of citizens and residents of Australia and visitors to Australia, and will not be made without consideration of all relevant circumstances.
A person must not depart Australia for a foreign country where they have:
- a DPO in force, and the person knows that the order is in force (or is reckless as to whether the order is in force), and
- the person's departure is not authorised by a DAC, and the person knows that the departure is not authorised by such a certificate (or is reckless as to whether the departure is authorised by such a certificate).
It is an offence for a person with a DPO in force departing Australia without a DAC. The penalty for such an offence is 12 months' imprisonment.
Note: A DPO does not prohibit travel to Australia's external territories (e.g. Christmas Island, Norfolk Island).
Act reference: PPLAct section 200B Departure from Australia of debtors prohibited
Operation of DPOs
Once a DPO is made, it is in force from the time it is made until it is revoked or set aside by a court. However, the Secretary must revoke a DPO in certain circumstances, or may revoke or vary it in other circumstances.
The Secretary can revoke or vary a DPO after becoming aware of new information or in response to representations made by the debtor.
Act reference: PPLAct section 200D Operation of departure prohibition order
Notification requirements to make, vary or revoke a DPO
Where the Secretary makes a DPO in respect of a debtor, the Secretary must notify:
- the debtor to whom the DPO applies,
- the Australian Border Force,
- the Australian Federal Police, and
- where the debtor is not an Australian citizen, the Department of Immigration and Border Protection.
Due to the consequences of a DPO, the Secretary will make every effort to ensure that the debtor receives a copy of the DPO as soon as possible after the order is made.
Where the Secretary makes a decision to vary or revoke a DPO, the person to whom the order applies and any other person to whom a copy of the order was provided must be notified. The Secretary must also notify the debtor where they have rejected the debtor's application to vary or revoke a DPO.
Act reference: PPLAct section 200C Notification requirements for departure prohibition orders, section 200F Notification requirements for revocations and variations.
Revoking a DPO
The Secretary must revoke a DPO in any of the following circumstances:
- The debts have been wholly discharged.
This condition is met when any combination of repayments, debt waivers or write-offs results in no portion of the debtor's debts being repayable.
The Secretary is satisfied that there are satisfactory repayment arrangements to wholly repay these debts.
A common sense approach is required to determine whether arrangements are satisfactory in each case. A repayment arrangement that requires the presence of the debtor in Australia to function is not a satisfactory arrangement. Where the debtor has sold property and needs to leave Australia before settlement occurs, a garnishee notice (see 1.1.G.10) in relation to the known proceeds would be a satisfactory arrangement.
The Secretary is satisfied that debts will be completely irrecoverable.
A person's debt will be regarded as completely irrecoverable when there is no prospect that the debtor will be able to make any payment towards it. See 184.108.40.206 for further details.
Even when the tests outlined above are not satisfied, the Secretary has the discretion to revoke a DPO where they believe it is desirable to do so. The Secretary will exercise this discretion in a way that supports the purpose of the Acts.
Varying a DPO
The Secretary also has discretion to vary a DPO. They can only use this discretion to correct errors on the face of the order.
The Secretary will not vary a DPO to allow a social security debtor to depart Australia. Where the Secretary is satisfied that it is appropriate and necessary for a debtor to depart Australia, for a defined period, the Secretary will either revoke the DPO or issue a DAC.
Act reference: PPLAct section 200E Revocation and variation of departure prohibition orders
Appeal & review
Appeals to the Federal Court or Federal Circuit Court
A person can appeal to the Federal Circuit Court or the Federal Court against the making of the DPO.
The court can either dismiss the appeal application or set aside the DPO. It can determine whether an order is properly made, but cannot exercise the administrative decision-making powers granted to the Secretary (T v Federal Commissioner of Taxation (1986) FCA 433).
Act reference: PPLAct section 200N Appeals to courts against making of departure prohibition orders, section 200P Jurisdiction of courts, section 200Q Orders of court on appeal
Review by the AAT
A person may apply to seek a review of a Secretary's decision by the AAT in regard to:
- revocation or variation of a DPO,
- issuing of a DAC, or
- the provision of security, and the substitution of later days on a DAC.
The AAT will undertake an independent merits review of the decision. The AAT can exercise the discretions granted to the Secretary when reviewing decisions.
Act reference: PPLAct section 200R Review of decisions
Australian Border Force Officers and members of the Australian Federal Police are authorised to prevent the overseas departure of a person subject to a DPO.
If an officer believes that a person is about to depart from Australia when a DPO is in force and without a DAC, they can require the person to answer questions or produce documents.
A person is required to answer these questions, even if the answers may incriminate them or expose them to a penalty. However, their answers are not admissible in evidence against them except in relation to a prosecution for providing false or misleading information or documents.
Act reference: PPLAct section 200S Powers of officers of Customs and members of the Australian Federal Police, section 200T Privilege against self-incrimination, 200U Production of authority to depart
It is an offence for a person to depart from Australia for a foreign country:
- knowing, or reckless as to whether, a DPO is in force, and
- the person's departure is not authorised by a DAC, and the person knows the departure is not authorised by such a certificate, or is reckless as to whether the departure is authorised by such a certificate.
Penalty: Imprisonment for 12 months.
A person commits an offence if they fail to answer a question or produce the document and they are capable of doing so.
Penalty: 30 penalty units.
It is also an offence of strict liability if a person who has a valid DAC fails to produce the certificate at the request of an authorised officer.
Penalty: 5 penalty units
A person who provides false or misleading answers to questions commits an offence and can be prosecuted.
Penalty: Imprisonment for 12 months.
An attempt to commit any of these offences is punishable as though the actual offence had been committed.