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.

6.7.2.40 Debt recovery by legal proceedings

Summary

SSAct section 1232 provides that the Commonwealth may take legal proceedings in a court of law to recover debts under the SSAct.

As of 1 January 2017, legal proceedings to recover a social security debt can be commenced at any time. The former 6 year statute of limitations no longer applies.

A debt that was deemed irrecoverable prior to 1 January 2017 cannot be pursued, however, Centrelink can still accept voluntary repayments of the debt (6.7.3.08).

Repayment of money recovered from a bankrupt debtor

A complex situation arises where a debt has been recovered from a bankrupt debtor by way of legal proceedings. In most cases, any legal proceeding should be discontinued once the debtor enters bankruptcy. Exceptions may exist where the debt is incurred as a result of fraud. Cases involving recovery in these circumstances should be referred for advice specific to the case.

Act reference: SSAct section 1232 Legal proceedings

Last reviewed: 3 January 2023

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