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.

6.7.3.60 Waiver of a small debt

Summary

SSAct section 1237AAA requires the waiver of debts less than, or likely to be less than the small debt waiver threshold amount (see 1.1.S.185 Small debt waiver threshold). The small debt waiver threshold amount is indexed on 1 July each year (the indexation day) by an indexation factor calculated in line with CPI increases.

Note: Section 1237AAE limits the circumstances in which an assurance of support debt may be waived under section 1237AAA, and the amount of the debt that may be waived. See (9.4.7).

Debts which are only under the small debt waiver threshold due to payments made towards that debt, or other waivers applied to the debt (for example, special circumstances waiver), are not eligible for the small debt waiver.

If Services Australia suspects fraud or serious non-compliance in relation to a debt waived under this section, the waiver does not prevent Services Australia from taking further action against the debtor or any other person.

Act reference: SSAct section 1237AAA Waiver of small debt

Policy reference: 9.4.7 AoS Debts

Indexation of small debt waiver threshold

The amount of the small debt waiver threshold is indexed every 1 July. It is normally indexed based on the change in the CPI over the 12 months to the previous March quarter. After indexation, the result is rounded to the nearest $1.00.

Act reference: SSAct section 1191 CPI Indexation Table, 1192 Indexation of amounts, 1193 Indexation factor, 1194 Rounding off indexed amounts.

Non-recovery of certain amounts

If a record of an amount less than the small debt waiver threshold is entered into the records of Services Australia, section 1230D of the SSAct requires the Secretary to waive the Commonwealth’s right to raise a debt in respect of the whole or a part of the amount if, the Commonwealth were to exercise that right, the resulting debt would be a debt within the meaning of Part 5.4 of the SSAct.

Act reference: SSAct Part 5.4 Non-recovery of debts, section 1230D Non-recovery of certain amounts.

One-off small debt waiver

The Social Security and Other Legislation Amendment (Technical Changes No. 2) Act 2025 provides a one-off waiver of the Commonwealth’s right to recover potential social security and certain family assistance debts which are recorded in Services Australia’s systems on 20 March 2026 as amounts that would be, or would likely be, a debt less than the small debt waiver amount if that amount were to be raised as a debt under the:

Note: Child Care Subsidy and Additional Child Care Subsidy are excluded and will be addressed through the reconciliation process.

Act reference: Social Security and Other Legislation Amendment (Technical Changes No. 2) Act 2025, Schedule 2 Part 3 One off waiver

When does the small debt waiver apply

Amendments made by Schedule 2, Part 2 of the Social Security and Other Legislation Amendment (Technical Changes No. 2) Act apply to:

  • debts under the small debt waiver threshold raised on or after 20 March 2026, and
  • debts raised before 20 March 2026 but varied (for example, following a review) to below the small debt waiver threshold on or after 20 March 2026.

More information on reviews can be found in Chapter 6.10.

Debts which are only under the small debt waiver threshold due to payments made towards that debt are not eligible for the small debt waiver.

Act reference: Social Security and Other Legislation Amendment (Technical Changes No. 2) Act 2025, Part 2 Item 13 Application of Amendments.

Policy reference: 6.10 Review of social security decisions & the appeals system.

Last reviewed: