9.4.7 AoS debts
This section covers the following:
- AoS debts
- AoS debt recovery
- AoS debt waiver, and
- incorrect payments to an assuree.
If an assuree receives a recoverable social security payment during the AoS period, the assurer is liable to repay the amount of payment received and an AoS debt will be raised against the assurer. In the case of a joint AoS, all the assurers are equally liable. Recoverable social security payments are outlined in 22.214.171.124.
If an assuree makes a claim for a recoverable social security payment, Services Australia must establish whether:
- the assurer is willing and able to provide an adequate level of support to the assuree, and
- it is reasonable for the assuree to accept that support.
Services Australia will generally contact the assurer before granting any recoverable social security payments to the assuree to ensure the assurer is aware that the assuree is making a claim for a recoverable payment, and that if this claim is granted it will result in a debt against the assurer (as discussed during the AoS interview). The assurer should be given the opportunity to support the assuree instead, and avoid this outcome.
In cases where advising the assurer could have a negative impact on the assuree, the Services Australia officer will liaise closely with Services Australia social workers to ensure that the assuree is not put at risk.
Example: The social worker considers that contacting the assurer in a domestic violence case will place the assuree at significant risk of harm. The Services Australia officer may defer contacting the assurer until the social worker assesses that the risk of harm is sufficiently diminished. This would generally be no longer than 3 months after recoverable social security payments are granted. The assurer remains liable to repay any AoS debt accrued during this time.
AoS debt recovery
AoS debt recovery action should commence as soon as practicable after the assuree begins to receive a recoverable social security payment, i.e. as soon as the AoS debt arises.
In the case of:
- AoS (security required) - recovery from the bank guarantee in the first instance can commence as soon as the assuree is granted a recoverable payment. Once the bank guarantee amount is fully recovered then any remaining debt will be directly sought from the assurer, and
- AoS (security not required) - recovery from the assurer can commence as soon as the assuree is granted a recoverable payment.
AoS debt waiver
The only ground on which an AoS debt can be waived is on the basis of special circumstances.
SSAct section 1237AAE strengthens debt recovery provisions by imposing extra rules when considering the waiver of AoS debts.
These extra rules prevent:
- Any waiver of debt if the assurer/s claim they were unaware of the obligations of providing an AoS.
- As mentioned in 9.4.2 a potential assurer must attend an interview with Services Australia where they will have these obligations explained to them. They must then confirm that they understand these AoS obligations.
- Any waiver of debt amounts which are lower or equal to the value of the AoS security (9.4.4), irrespective of whether the AoS was provided by a single assurer or joint assurers.
- Waiving of debt in cases where a joint assurance is provided, unless the Secretary is satisfied that the amount of debt cannot be recovered from any or all of the assurers.
Incorrect payments to assuree
Where an 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 a debt against the assuree, not an AoS debt against the assurer. This debt owed by the assuree arises under SSAct section 1223.
If an AoS debt is being recovered from the assuree under SSAct section 1223, any debt raised against the assurer will be reduced by the equivalent amount recovered from the assuree and the assurer will not be liable for the debt raised against the assuree under section 1223.
Act reference: SSAct section 1061ZZGG Liability to pay for social security payments, section 1227 Assurance of support debt, section 1237 Power to waive Commonwealth's right to recover debt, section 1237AAE Extra rules for waiver of assurance of support debts
Policy reference: SS Guide 126.96.36.199 Assurance of support debts, 188.8.131.52 Overview of the AoS scheme, 9.4.2 Lodging an AoS, 9.4.4 AoS securities