4.5.3.50 Acceptance & processing of a resolution payment

Determination of an application

Subsection 12(1) of the Determination provides that a decision on an application under section 10 is to be made by the Secretary. Under section 234 of the SS(Admin)Act, the Secretary may delegate to an officer all or any of the powers of the Secretary under the social security law.

As set out under section 13 of the Determination, a computer program arranged by the Secretary may also be used to make a decision on a person’s application in limited circumstances (4.5.3.10).

Under subsection 12(2) the Secretary must, in relation to each relevant debt in a person’s application and depending on the outcome of the assessment of the debt, decide that the person is either entitled or not entitled to be paid a resolution payment. If a person is entitled to a resolution payment, the Secretary must include the amount of the payment in the decision.

The Secretary is not required to make a decision in relation to a relevant debt while waiting for a person to comply with a request for additional information under subsection 11(1) in relation to the debt.

Offers & acceptance

If a decision is made that a person is entitled to a resolution payment, the Secretary will provide written notice to the person making an offer to pay the resolution payment of the amount determined under section 9 of the Determination. The notice of offer will explain the 'effect of effective acceptance' as provided for in subitems 2(5) and 2(6) of Schedule 3 to the Social Security and Other Legislation Amendment (Technical Changes No. 2) Act 2025. If an entitled person (or a person acting on behalf of a person) decides to accept an offer, they will be required to release the Commonwealth from all liability to any claim against the Commonwealth arising as a result of income apportionment in respect to the relevant debt.

The notice will also inform the person that they may consider obtaining independent advice about whether to accept the offer given the effect of effective acceptance. A person will have 56 days (or a longer period if extended by the Secretary) to accept or reject an offer. This is known as the 'acceptance period'. A person may accept or reject an offer of a resolution payment under the Resolution Scheme.

The Secretary may, on request, extend the time on the acceptance period for an offer, or the period for applying for review by 28 days or such longer period as determined by the Secretary. The same criteria outlined above applies.

The acceptance must be in the approved form. If there is more than one relevant debt in relation to which an offer has been made, the person must specify which offer has been accepted.

The acceptance must be signed in the manner approved by the Secretary and must be lodged with the Secretary by the end of the acceptance period (or any extension period). However, despite the above the Secretary may still agree to accept the offer if the Secretary considers:

• there are special circumstances that make it appropriate to do so, or
• after an initial rejection of the offer, the person decides to accept the offer after further consideration and the Secretary considers there are special circumstances that make it appropriate to do so.

If an entitled person (or a person acting on behalf of a person) decides to accept an offer, they will be required to release the Commonwealth from all liability to any claim against the Commonwealth arising as a result of income apportionment in respect to the relevant debt.

This does not mean that the person cannot seek review of other aspects of their debt (if they have not already exhausted the review mechanisms such as internal review, review by the ART or in some cases by the Federal Court). These reviews may result in or require reassessment of the debt, and the reviewer would then apply the prospective decision-making rules that are set out in Division 3 of Part 3.11 to the SSAct.

For example, if an individual’s debt was calculated on the basis that they were paid as a single person (rather than the partnered rate), and their partner's income was affected by income apportionment. If this person accepts a resolution payment in respect of this debt, they can still under the social security law seek:

• review of the decision to treat them as a member of a couple
• review of the amount of income assessed (for example, if they had evidence showing their partner earned less over the relevant period than what was assessed). In this case, the income would be re-assessed using the prospective decision making rules that are set out in Division 3 of Part 3.11 to the SSAct
• a waiver of the debt under the waiver provisions, including sole administrative error waiver or special circumstances waiver.

The outcome of any of the reviews (or waiver decision) above will not impact the individual’s acceptance of the resolution payment.

Payment of resolution amount

If a person lodges an effective acceptance in relation to a relevant debt either on their own behalf or on behalf of another person, a resolution payment may be paid into a bank account nominated by the person as part of this process (which may include the bank account of the person’s payment nominee) or applied to reduce an outstanding amount of a debt due to the Commonwealth under any prescribed Act. The prescribed Acts are defined in section 5 of the Determination.

The Secretary may direct that the whole or part of the resolution payment be paid in a different way to that provided for by the election. If the Secretary gives a direction, the relevant amount will be paid in accordance with that direction.

Exemption of lump sum payments

A resolution payment paid to an individual under the Resolution Scheme is not subject to taxation under a law of the Commonwealth.

The Secretary has made a Determination under subsection 8(11) of the SSAct to exempt resolution payments from the definition of 'income' for the purposes of assessing social security entitlements.

By determining a resolution payment is an exempt lump sum under the SSAct, the amount of such a payment will not be assessed as ordinary income for the purposes of the recipient’s social security payment.

Debt recovery

Under section 31, if a recipient of a resolution payment has received a resolution payment and was not entitled to that payment, the amount paid is a debt due to the Commonwealth under item 5 of Schedule 3 to the Act. Subsection 31(2) specifies that the debt will be treated as if it were a debt arising under the SSAct and therefore recoverable under Chapter 5 of that Act.

Refusals

If a determination is made by the Secretary that a person is not entitled to be paid a resolution payment in relation to a particular debt, the Secretary must provide written notice to the person refusing the application.

Under subsection 15(2) of the Determination, the notice must do all of the following:

• specify the date of the refusal
• specify the debt to which the refusal relates (if the person’s application under section 10 relates to more than one particular relevant debt)
• include the decision that the person is not entitled to be paid a resolution payment and the reasons for the decision
• inform the person that they may, within 56 days from the date of the refusal (the designated period), apply for a review of the decision and explain how to make that application under section 21 of the Determination
• inform the person that they may apply for an extension of the designated period and explain how to make that application.