188.8.131.52 Miscellaneous categories of debts
This topic outlines and explains the miscellaneous categories of debt that exist under the SSAct:
- amount calculated using non-income/assets tested add-on amount, no add-on amount payable
- amount calculated using incorrect non-income/assets tested add-on amount, add-on amount payable
- person other than payee obtaining payment of a cheque debt
- EdEP debts
- data-matching debts
- MOB advance debts
- other advance payment debts
- debts arising under the Farm Household Support Act 1992
- CFP debts, and
- debt from failing to comply with a garnishee notice.
Amount calculated using non-income/assets tested add-on amount - no add-on amount payable
If a person has received a RAA, or LLNS, or job search training supplement, or program of work supplement that they should not have received, each of the following amounts is a debt to the Commonwealth.
Act reference: SSAct section 1223(7) Amount calculated using non-income/assets tested add-on amount-no add-on amount payable
Amount calculated using incorrect non-income/assets tested add-on amount - add-on amount payable
If a person has received a RAA, or job search training supplement, or newstart training allowance that was greater than the amount that should have been received, the difference between the received amount and the amount of payment that would have been paid if the amount had been correctly calculated, is a debt to the Commonwealth.
Act reference: SSAct section 1223(8) Amount calculated using incorrect non-income/assets tested add-on amount-add-on amount payable
Person other than payee obtaining payment of a cheque
If a person other than the payee obtains the value of a social security payment or FAA cheque, that person is required to repay the value of the cheque.
Example: Centrelink sent a cheque to William for the amount of his fortnightly YA, and his flatmate Barbara stole the cheque and cashed it. She would be required to repay the value of the cheque back to the Commonwealth.
Act reference: SSAct section 1224AA Person other than payee obtaining payment of a cheque
If a person receives an EdEP in order to enrol in an approved course, but does not use that money to pay enrolment fees within the designated calendar year, the amount of the EdEP becomes a debt due to the Commonwealth.
Example: Patrick was given an EdEP by Centrelink in order to enrol in a TAFE course in 2009, but did not enrol until 2010. He now has to repay the full amount of the EdEP.
Act reference: SSAct section 1224B EdEP debt
Debts under the Data-matching Program (Assistance and Tax) Act 1990
If a person received a social security payment that the data-matching program identified as an overpayment or incorrect payment, the person is liable to repay the payment.
Example: Although Jon did not declare any earnings towards his YA, the data-matching program identified that he received earnings for that period. He is liable to repay the incorrect YA payment.
Act reference: SSAct section 1224C Data-matching Program (Assistance and Tax) Acts debts
MOB advance debts
If the recipient of MOB or another person knowingly made a false statement or declaration in order to receive an advanced payment of MOB, or failed to comply with a provision of the social security law, and the Secretary determines that the person's eligibility has ended during the advance payment period, the amount of the MOB advance payment is a debt due to the Commonwealth.
The debt amount is calculated by dividing the amount of the advance by 13 and multiplying this figure by the number of pay days in the advance period.
Example: Tom advised Centrelink that his treating doctor's certificate was valid until the end of November, and received an advance payment of $1,690 based on that information. It was later discovered that the certificate was valid only until the beginning October. He now has to repay the overpayment amount calculated by Centrelink from October to the end of November.
This overpayment amount is $1,690 ÷ 13 × 4 (number of pay days) = $520.00.
The advance payment period for MOB advance is the 26-week period starting on the first payday for which it is practicable to pay the advance and adjust the recipient's MOB payments.
Act reference: SSAct section 1224D MOB advance debts
Debts arising from advance payments
Where a person received an advance of a social security payment, which they had not repaid before the advance stopped being payable, and did not receive another social security payment immediately afterwards, the unrepaid amount is a debt due to the Commonwealth.
If the person is still receiving another social security payment, the advance is repaid through fortnightly withholdings.
Example: Peter received an advance JSP payment on 1st July before his JSP eligibility was cancelled on 2nd July, and is not eligible to receive any other benefit. He has to repay the full amount of his JSP advance payment.
Act reference: SSAct section 1224E Debts arising from advance payments of social security entitlements
Debts arising under the Farm Household Support Act 1992
If a person has a debt for an amount of exceptional circumstances relief payment, re-establishment grant or farm help income support, if that debt is recoverable under section 56 of the Farm Household Support Act 1992 the debt is also a debt that is due to the Commonwealth under the SSAct.
This debt is recoverable through:
- deductions from an exceptional circumstances relief payment or farm help income support
- deductions from a social security payment
- legal proceedings, or
- garnishee notice.
Act reference: SSAct pre-1 July 2014 section 1227A Certain debts arising under the Farm Household Support Act
If a social security recipient or their partner receives a lump sum arrears payment of a comparable foreign payment, the money will be treated as if it were regular payments, not as a lump sum. This is to determine how much social security payment would have been paid in the lump sum period.
Example: Colin received a CFP as a lump sum for the period of 1st July to 1st December 2007, during which time he was also receiving Age. In determining how to treat the CFP, the lump sum is divided across the 4-month period, and the pension income test is used to determine how much Age Colin should have been paid in that period.
The amount by which the social security payment would have been reduced is a debt due to the Commonwealth.
Act reference: SSAct section 1228A Comparable foreign payment debt recovery
Debt from failure to comply with garnishee notice
A third party (garnishee debtor) can be served with a garnishee notice to pay an amount in respect of a debt due by another person (original debtor). If the garnishee debtor fails to comply with the notice, the outstanding debt amount is recoverable from the third party by legal proceedings or garnishee notice.
The outstanding debt amount is the lesser of:
- as much of the amount specified in the garnishee notice as the garnishee debtor was able to pay, or
- as much of the debt that was due by the original debtor at the time when the notice was given as remains due from time to time.
If all or part of the debt is repaid by either the garnishee debtor or the original debtor, then both debts are reduced by the amount that the Commonwealth has recovered and the original debt notified under SSAct section 1233 is reduced by the amount so recovered.
Act reference: SSAct section 1230 Debt from failure to comply with garnishee notice, section 1230A Debt from failure before 1 July 1991 to comply with garnishee notice under the 1947 Act