The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia. People subject to non-payment periods, penalty recovery or payment suspension while under income management

Non-payment periods or suspensions

People who have mutual obligation requirements must continue to meet these requirements when they are being income managed. Similarly, all recipients must continue to attend appointments or comply with other requests whilst being income managed. If an income managed person is subject to a sanction for non-compliance such as:

  • a non-payment period
  • a penalty recovery, or
  • a suspension for not meeting another requirement

as a result of not meeting requirements, Centrelink will consider the penalty or suspension implications for any regular deductions that the person has in place. Centrelink should alert the person to the possibility that they may need to make alternative arrangements for the payment of any ongoing deductions while their payment is subject to the non-payment period, penalty recovery or suspension.

Note: A person may continue to receive some payments, such as FTB, whilst their primary payment is affected by a non-compliance sanction. These continued payments should be considered in determining any ongoing deductions.

A person in a non-payment period or with a penalty-affected instalment is still able to access their income managed funds as normal, providing their income management account has a credit balance and the allocations are for priority needs. There are 3 likely scenarios for an income managed person with a penalty affected instalment:

  • if the person has a nil balance remaining in their income management account, then Centrelink will need to inform the person that no allocations will be made or the allocation may be affected for the person for the non-payment period
  • where a person has a small balance that would soon be fully expended if the person's normal deductions remain in place, the person should be encouraged to reprioritise their allocations by modifying existing deductions (e.g. lowering the dollar amount of deductions) or make alternative personal arrangements to meet these priority needs, or
  • where the person has a large balance and some existing allocations in place, then these deductions should be maintained, unless advised by the person to cease or change the existing allocations.

Where Centrelink is unable to contact a person subject to a non-compliance sanction, existing allocations should be maintained while the person's income management account balance remains in credit and there is evidence that the person is accessing their income managed funds.

Once the sanction ceases, new income management allocations will need to be created for the person to meet their priority needs, or any temporarily suspended allocations resumed, on the advice of the person.

A person may be subject to a non-payment period at the time that income management is commenced. In this case, they should negotiate income management related to any current payments that they are receiving, with a review once usual payments are restored.

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