184.108.40.206 Assurance of support debts
SSAct section 1227 covers the circumstances under which a person may be liable to pay an AoS debt.
The term 'assurance of support debt' is defined in SSAct section 23(1).
An AoS is a legally binding agreement between one or more Australian residents (the assurer/s) and the Australian Government, whereby the assurer/s agree/s to provide financial support to a person or persons (the assuree/s) in Australia.
Period of the AoS
The AoS period commences on the day an assuree arrives in Australia or is granted the relevant visa, whichever is the later date. The AoS period can be 12 months, 2 years, 4 years or 10 years depending on the visa subclass. New migrants who are holders of the contributory parent visa (permanent subclass 143 and subclass 864) have a 10 year AoS period. For subclass 202 visa holders under the Community Support Programme, the AoS period is 12 months. In any other case, the AoS period is 2 or 4 years.
Any social security payments specified under the Social Security (Assurances of Support) Determination 2018 and made to the assurees during the AoS period becomes a debt to the Commonwealth under SSAct section 1227. As for other debts under the SSAct, Chapter 5 provides the framework for recovering the debt.
Rationale behind AoS debt recovery
The policy rationale behind AoS debt recovery is to ensure that recovery action commences as soon as practicable after the recipient commences to receive a recoverable payment specified under the Social Security (Assurances of Support) Determination 2018.
More than one person may act as an assurer with respect to a particular assuree. Multiple assurers are always jointly and severally liable for any AoS debt (see explanation of this term below).
Joint & several liability
Where there is more than one assurer to an AoS, each assurer is 'jointly and severally liable' for the whole of any AoS debt. That is, there is only one debt, but each assurer is liable for the WHOLE of that debt, and the whole of that debt MAY be recovered from one assurer.
Example: Assume that Sam is an assuree and Ryan, Jane and Alex are Sam's assurers. Ryan lodges $5,000 of his own funds as bond. During the AoS period, Sam is paid a total amount of $8,500 in SpB. A debt of $8,500 is raised against Ryan, Jane and Alex. After the bond is recovered, the remaining AoS debt is the responsibility of Ryan, Jane and Alex. Even though the $5,000 bond has effectively been recovered from Ryan, it does not preclude Ryan from liability for the remaining $3,500 debt. If Jane repays $500, Ryan, Jane and Alex are each liable for the entire remaining balance of $3,000.
Enforceability of an AoS
Assurers sign an AoS agreement in respect of the AoS that is given. This agreement is in the form of a statutory declaration and includes an undertaking to repay the Commonwealth where the assuree receives a recoverable social security payment (as per Social Security (Assurances of Support) Determination 2018).
Waiver of AoS debts
The only ground on which an AoS debt can be waived is on the basis of special circumstances. In the case of AoS debts, the special circumstances referred to in section 1237AAD need not refer specifically to the circumstances of the assurer (the debtor). Therefore, the decision maker can also consider the circumstances of the assuree in deciding whether there are any special circumstances in a particular case. The special circumstances do, however, need to relate to the question of whether recovery is appropriate. If an assurer claims that they did not understand the implications of signing the AoS, this is NOT considered to be special circumstances.
AoS debts raised against assurers under SSAct section 1227 cannot be waived under the administrative error waiver provision contained in section 1237A of the Act. This is because section 1237A only applies where the payment was received by the DEBTOR in good faith. Waiver of such a debt is not possible, since an AoS debt is not actually raised against the recipient of the payment. See the AAT decision in Secretary To the Department of Social Security and Vera Kratochvil (1995) AATA 27.
It is not necessary for a decision maker to wait for the completion of the AOS period before deciding to waive a debt under SSAct section 1237AAD. A delegated decision maker may waive any debt if he or she is satisfied that there are special circumstances that justify the waiver, regardless of whether the 12 month, 2 year, 4 year or 10 year AoS period has expired.
Note: Where a debt has been waived and part of the debt or all of the debt is recovered by the enforcement of the bond then the bond money should be refunded to the assurer.
Recovery of debt - single assurer
Where there is only one assurer, recovery of a payment provided to an assuree is straightforward. First the amount of recoverable payment is deducted from the bond (if any exists). If there is no bond, or if the amount of payment provided to the assuree exceeds the bond, the amount of the outstanding liability will be recovered from the assurer as per the Commonwealth debt recovery processes.
A situation may arise where an AoS covers more than one person.
Example: An applicant may be granted a permanent visa on the basis of meeting primary criteria, and his or her dependent children may be granted visas of the same subclass on the basis of meeting secondary criteria.
Any AoS in relation to the applicant will also apply to the dependents. Any recoverable payment/s made to the dependent children during the period of the assurance SHOULD ALSO be recovered from the assurer/s. This should be done, in the first instance, by enforcing part or all-of-the bond provided by the assurer (if any) in relation to the applicant who met the primary criteria for grant of the visa. Any balance remaining should then be recovered by normal debt recovery procedures.
Recovery of debt - multiple assurers
Where there is more than one assurer, the amount of payment provided to the assuree must still first be deducted from the bond. If any debt remains after the bond (if any) is enforced, Centrelink must pursue recovery from each of the assurers. As a matter of policy, Centrelink should seek recovery from all assurers.
If recovery from a particular assurer is not possible then Centrelink should defer/cease recovery action.
Example: An assurer/s is bankrupt or cannot be located.
Incorrect payment to assuree
Where the assuree (the recipient of the payment) is incorrectly paid, such as due to administrative error or misrepresentation, a debt may be raised against the assuree. It should be noted that this is not an AoS debt against the assuree - ONLY an assurer can owe an AoS debt. Instead, this debt owed by the assuree arises under SSAct section 1223.
Note: However, this does not remove the assurer's liability to repay the amount in accordance with the AoS. An assuree may still be legally entitled to SOME of the payment obtained by them, and in such a case only the amount incorrectly paid to the assuree will be raised as a debt under section 1223.