188.8.131.52 Debt recovery by legal proceedings
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