Managing recovery and non recovery of Centrelink debts 107-05010000

An Account Payable letter issues when the debt is raised and the Account Payable (OPAOD) screen is completed. The Account Payable letter advises:

• the date the advice was issued
• the reason for the debt, including a brief explanation of why
• the period of the debt
• the debt amount. If applicable, the 10% Recovery Fee:
• will show separately, and
• as a component of the total
• the due date. It is 28 days after the date of issue of the notice
• the payment options
• that an interest charge (IC) may apply if the person does not:
• enter into a payment arrangement, and
• make a payment before the due date
• IC may apply to the debt if the person:
• fails to comply with the payments arrangement, or
• the payment arrangement has terminated
• the contact details for enquiries or requests for review of the debt
• data matching information
• the consequences should the debt remain unpaid

Interest Charge (IC)

IC only applies to former Centrelink customers. Interest will be applied to the total amount of their outstanding Centrelink debt/s. Interest compounds daily until a payment is made under an acceptable payment arrangement.

To avoid the IC, the person needs to, within 28 days of the date of the notice:

• pay their debt in full
• continue to make payments under their existing payment arrangement, or
• enter into a payment arrangement and make a repayment under that payment arrangement

A reminder letter generates on the date the Account Payable was issued + 30 days.

This occurs where the customer does not have a current, provisional, pending or future arrangement.

The letter:

• has a payment slip at the bottom which lists the available payment methods
• asks the customer for payment in full or, if unable to do this, to phone within 7 days
• reminds the customer that payment of their debt is overdue
• warns if they are eligible for a tax refund it will be used to repay outstanding Centrelink debts
• advises of further action if they do not make an arrangement, for example: Interest Charge, garnishee, Departure Prohibition Orders or civil recovery

A reminder letter will not be sent for debts with:

• a status of Finalised (FRE, FND, FWV, FDV, FWO, FRN, PKI or PKW)
• a status of Deleted (DEL)
• a status of Determined - Written Off (DWO) with a reason of:
• 'DOS' (Customer overseas)
• 'PRI' (In prison)
• 'STH' (Short term hardship)
• 'WUN' (Whereabouts unknown)
• an Authority of 'OGD' (Other Government Department)
• a debt reason of:
• 'CMM' (Compensation Charge (Insurer))
• 'CMB' (Compensation Breach Debts (Insurer)) or
• 'ITR' (Internal Transfer)
• a status of Assurance of Support (AOS) protected, or
• a Customer Reference Number (CRN) outstanding balance of less than $20.00

Customer circumstances are also taken into account. The reminder letter will not be sent when:

• the customer does not have a current address
• key event will be recorded on the Key Dates (OPKD) screen when the reminder letter is due to be issued but is not issued because the customer has an end dated address
• the customer is deceased

• is generated when an arrangement is coded on the:
• Regular Cash Payments (OPRC) screen, or
• Irregular Cash Payments (OPIC) screen
• confirms the arrangement and advises the customer to contact if finances change or if unable to make a payment
• warns of possible further action including garnishee, Departure Prohibition Orders or civil recovery if the payment arrangement is not kept and the customer does not contact
• is generated overnight
• will not be sent to the customer:
• when the due date is changed on a regular or irregular cash arrangement
• when payments are missed on the Repayment Schedule (OPRS) screen
• where the payment due date is within 3 days

• sent when a regular cash, irregular cash or direct debit payment is not received by the due date plus 7 days
• requests the customer to pay the overdue amount or, if unable to do this, to phone within 7 days
• advises the customer if they are eligible for a tax refund it will be used to repay outstanding Centrelink debts
• warns of possible further action including garnishee, Departure Prohibition Orders or civil recovery

When Services Australia or the debtor terminates or alters a payment arrangement, the debtor receives either verbal or written advice, explaining their arrangement will end in 28 days.

If during the 28 days (following termination of the arrangement), the debtor has an acceptable payment arrangement in place or they are honouring their agreed payment arrangement, no interest will be charged.

If the debtor is requesting termination of their current payment arrangement:

• gather information to assess the customer's capacity to repay, or
• accept the arrangement without obtaining financial information, when the repayment is within the acceptable guidelines

Debt Staff have the discretion not to terminate an arrangement at the debtor's request where:

• it does not seem reasonable, and
• it appears that there is an attempt to avoid the Interest Charge

When terminating an arrangement, record a Future Activity (FAL) 28 days in the future. When the FAL matures, manually cease the arrangement on the Overpayment Arrangement List (OPAL) screen.

Termination of an Arrangement Notice (GNOTDMNEND) will automatically issue. The notice includes a 14 day grace period where no IC will apply. This ensures the debtor is not penalised for a termination or alteration of their arrangement has been initiated by the agency.

A separate notice informing the debtor the date the IC will apply to their outstanding debt/s is sent automatically when:

• a new debt has been determined (DET), and
• there are no other current active debts

The notice provides information about:

• the IC
• their outstanding debt/s
• the outstanding balance (total of all debt(s) IC has been applied to

• sent when a discount agreement is coded on the Discount (OPDI) screen
• confirms the agreement and advises the customer the discounted amount will be accepted as full payment if received by the due date
• generated when the agreement is made, rather than at the end of the business day:
• if the due date is changed on the OPDI screen, a new discount letter will be sent
• will not be sent when the payment due date is within 3 days

• sent when a direct debit (voluntary deduction) is coded and all fields completed on the Direct Debit (OPVD) screen
• advises the customer:
• the name of the financial institution deductions will be made from
• their nominated financial institution account number
• the financial institution account name
• the rate and timing of deductions
• when deductions will commence
• to ensure there is enough money in their account to cover each payment as, if funds are not available, their financial institution may charge a fee
• details of the Direct Debit Request Service Agreement (including information on making changes, customer responsibilities, privacy and complaints)

If a customer’s direct debit declines on its scheduled day, a letter will automatically be sent out advising them of the actions they are required to take.

This letter advises customers:

• Their payment arrangement has now been cancelled,
• How to set up a new arrangement, and
• The customer may be charged interest if a new arrangement is not set up

Service Officers will be able to view this letter on Customer Overview or the outbound correspondence tab in Customer First.

• Issued by the payment system (for example: JobSeeker Payment, Pensions, etc.) when the Withholding Instruction (OPWH) screen is updated, and
• advises the customer the amount to be deducted from their ongoing payments

• Is sent to customers, who are no longer having a withholding deducted from a Centrelink payment
• Advises the customer if they are eligible for a tax refund it will be used to repay outstanding Centrelink debts
• Warns of possible further action including garnishee, Departure Prohibition Orders or civil recovery
• Is issued when the following criteria are met:
• a withholding arrangement (including third party withholdings) ceased 7 days in the past
• the debt does not have current or provisional payment arrangement
• the outstanding Customer Reference Number (CRN) balance is > than or equal to $20
• the customer is not deceased
• and at least one debt meets all of the following criteria:
• the debt is not finalised (for any reason)
• the debt does not have a status of Determined - Written Off with a reason other than 'WUN' (whereabouts unknown), 'AUT' (automatically written off) or 'NCE' (not cost effective)
• the debt does not have an Authority of 'OGD' (other Government department) or 'INT' (international recovery)
• the debt does not have a Debt Reason code of 'CMM' (compensation charge - insurer) or ITR (internal transfer)
• the AOS (Assurance of Support) indicator is not set to 'Y'