Raising debts of advance payments 107-04030000

Advance payments are available for various Social Security Entitlement payments.

Advance amounts not repaid become a debt when all of the following apply to a customer. They:

• have received an advance payment of a Social Security Entitlement or ABSTUDY
• are no longer entitled to a Social Security Entitlement payment, Income Support Payment or ABSTUDY
• have not repaid all of the advanced amount at the time the Social Security Entitlement payment or ABSTUDY stops

Customers can transfer from one Social Security Entitlement to another. If the transfer is finalised within 21 days, the advance, and recovery moves to the new payment.

When customers transfer from a Social Security Entitlement to a non-Social Security Entitlement, an outstanding advance is a debt.

Note: this procedure does not apply to advance payments for the Home Equity Access Scheme. See Advance payments for Home Equity Access Scheme loans.

If the payment of an advance is for:

• a Social Security Entitlement payment or ABSTUDY, go to Step 3
• Family Tax Benefit (FTB) go to Step 4
• Pharmaceutical Allowance (PhA), go to Step 5
• Special Employment Advance (SEA), go to Step 6
• Mobility Allowance (MOB), go to Step 7
• hardship advance, go to Step 8

If the customer:

• has transferred from one Social Security Entitlement to another, go to Step 10
• has transferred from a Social Security Entitlement to ABSTUDY or vice versa, go to Step 9
• is no longer in receipt of a Social Security Entitlement or ABSTUDY, go to Step 13

An Advance of FTB is paid to customers who meet the qualification criteria.

If the:

• customer loses entitlement to FTB Part A, the advance amount owing at this time becomes a debt. Go to Step 13
• customer's rate of FTB Part A has decreased, and:
• is now below the standard rate of the advance repayment amount. This means all of the ongoing rate of FTB Part A will be used to recover the advance, go to Step 12
• it will now take an unreasonable amount of time to repay the FTB advance, see Step 11

An unpaid PhA advance is a legally recoverable debt for customers who have transferred to:

• ABSTUDY
• Disability Support Pension (DSP), and are both:
• under aged 21
• have no dependent children
• Parenting Payment Single (PPS), and
• are under Age Pension age

Is the unpaid amount of the PhA advance a recoverable debt?

• Yes, go to Step 10
• No:
• finalise as 'no debt'
• record all details on a DOC
• procedure ends here

Has the customer transferred from one SEA qualifying payment to another?

• Yes, go to Step 10
• No, go to Step 13

Debts do not result for customers who receive an advance payment then, during the advance pay period:

• unexpectedly ceases or reduces:
• work
• training, or
• job search activities as part of an agreement with an Employment Services Provider, or
• otherwise loses qualification for the standard or higher rate of MOB

Only raise a debt if the customer deliberately misrepresents their circumstances in order to receive an Advance payment. For example, that their qualifying activity, such as work, will continue for at least the next 26 weeks.

Is there a legally recoverable debt?

• Yes:
• create a new debt record manually on the Debt Management and Information System (DMIS), or
• if a reassessment activity results in a debt, action the undetermined debt in DMIS
• record all details on a DOC
• see the Resources page for how to calculate the MOB advance debt amount
• No:
• finalise as 'no debt'
• record all details on a DOC
• procedure ends here

This is an advance of a customer's first instalment of their social security payment. It happens either at grant or immediately following restoration of their payment. It is to assist customers in severe financial hardship.

Where a customer has a hardship advance the amount owing may become a debt when:

• their entitlement to the payment ceases, and
• they have not repaid the amount of the advance payment

The amount will be recovered if the customer:

• has provided false information when requesting the advance, or
• is a statement reporter, for example JobSeeker Payment (JSP) or Youth Allowance (YA)

This amount will generally not be legally recoverable for:

• notification reporters (for example Age Pension customers without employment income)

Note: review date of effect rules for adverse determinations. See:

• Dates of effect for review of decision outcomes
• Using the correct date of effect when raising debts

Is there a legally recoverable debt?

• Yes:
• create a new debt record manually on the Debt Management and Information System (DMIS), or
• if a reassessment activity results in a debt, action the undetermined debt in DMIS
• No:
• finalise as 'no debt'
• record all details on a DOC
• procedure ends here

The Advance Payments Summary (AVCS) screen displays an outstanding balance if:

• a customer's ABSTUDY has cancelled, and
• they transfer to a Social Security Entitlement

A review will appear and become due 21 days after the cancellation.

Check the Future Activity List (FAL) screen for a review. It will contain the text ABY/AVC Advance transfer - Advance Payment recovery action.

Does this activity appear in the FAL screen?

• Yes:
• no further action required
• procedure ends here
• No, ABSTUDY cancellations can happen incorrectly as a result of the benefit transfer activity. These activities will not appear on the FAL screen. In these cases:
• use Fast Note  - select  Auto text, use Debts > Debt Action Referral > ABSTUDY Debt Action to refer to the ABSTUDY Processing Team
• the outstanding advance then results in a debt

Debts raise automatically for advances paid under the Social Security Act 1991.

Go to Step 13.

The outstanding balance will transfer to the new Social Security Entitlement for automatic recovery if:

• the customer transfers from one Social Security Entitlement payment to another, and
• the transfer is finalised within 21 days

As the customer continues to receive a Social Security Entitlement, no legally recoverable debt exists:

• no further action required
• procedure ends here

Sometimes a customer's rate of FTB Part A falls below the advance payment rate. If so, the system will calculate the time it will take to repay the advance.

When the calculated recovery period is greater than 1 year:

• between one year (365 days) and 2 years (730 days):
• a Service Officer can raise a debt at their discretion
• go to Step 12
• two years (731 days) or more:
• an advance debt will raise automatically
• go to Step 13

Take the customer's circumstances into account before making a decision to manually raise an advance debt.

It is important Services Australia recovers advances at the highest rate to avoid writing off portions of advance amounts.

Raise an advance debt where all of the following apply:

• it is likely that there will be a debt raised in the future
• fully paying the advance through repayments is unlikely. For example:
• a customer's FTB payments are likely to cancel within the next 12 to 24 months because a child is reaching the child age limit or income exceeding thresholds, and
• the advance balance is above $50

Raising the debt now prevents the advance balance falling below $50 when FTB cancels and the debt is automatically waiving.

Do not raise an advance debt if:

• there is nothing to suggest the customer's payment will cancel in the following 12 to 24 months. This means the advance will recover as normal
• the advance balance is less than $50
• the balance is over $50 and raising the debt at a later date is unlikely

Are you raising a manual debt?

• Yes, go to Step 14
• No, procedure ends here

When a customer with a SSA advance balance outstanding has their payments cancelled, the system creates an internal review. The review matures 21 days after the date of cancellation.

Upon maturity, if the customer is not receiving a Social Security Entitlement payment:

• DMIS generates the debts automatically if the amount is $50 or more
• debts of less than $50 are automatically waived
• the system issues a standard advice to the customer

Procedure ends here.

The system creates an internal review when:

• FTB payments for a customer are cancelled and they have a FTB advance balance outstanding, or
• the FTB A rate reduces to a level where it will take 2 years or longer to repay the advance

The review matures 21 days after the date of cancellation or rate reduction.

If the customer is not receiving FTB by instalment at that time, or a debt reason of 'ARU' - advance payment period unreasonable exists:

• DMIS generates a determined debt automatically, and
• sends a standard advice to the customer

Note: sometimes a customer loses FTB entitlement due to the death of an FTB child. In these cases, the recovery of the outstanding balance may be made from the Lump Sum Bereavement Payment (LBP).

Procedure ends here.

An internal review is created when an ABSTUDY record with an advance balance outstanding is cancelled. The review will mature in 21days after the cancellation.

The review will not generate if ABSTUDY was incorrectly cancelled via benefit transfer. The outstanding balance will need to be manually raised as a debt.

Raise the debt using the Debt Action script. Complete:

• Debt Event: NDBFAPAV
• Debt Reason: Advance Repayment Period Unreasonable (ARU)
• Debt start date: and Debt end date: Date of raising of the debt
• Debt amount: Balance of the FTB advance

To change the outstanding advance balance to nil, run the Advance Payments workflow. Select the 'Modify' function and update:

• Balance change reason: to Debt raised
• Record the amount raised as a debt
• Debt ID field. Include the Debt ID

A DOC is recorded. The sending of a written advice to the customer to explain the reason for the debt also occurs.

If the Debt Action script is unavailable, raise the debt shell and the debt manually.