Categories of debt raised under subsection 1223(1) 107-04020020

Common circumstances (not exhaustive):

• the payment was not payable
• a customer receives a payment but failed to notify
• a customer receives a payment as a result of a false statement or misrepresentation
• a customer receives a payment as a result of system or administrative error
• a customer receives a payment because of an authority or direction. The authority or direction is by the person who would benefit from the payment. The person withdrew the authority prior to the issue of the payment
• the payment was for the benefit of someone who died before the payment was made

If a customer authorises or directs a third party to receive their payment, Services Australia will consider the customer to have received the benefit of the payment.

An exception applies if the customer made a mistake providing the authorisation. For example, a debt may be raised against a third party that received the payment if:

• a customer directs the agency to send their payments to a particular bank account, and
• the account details are incorrect

A recoverable debt may result from an incorrect payment.

These are 'no-fault' debts. The customer has not contributed to the debt occurring for:

• system error - when a computer program generates an incorrect full or part payment. For example, a customer receives a payment due to incorrect information provided from the Child Support Agency system
• administration error - when information is incorrectly coded or updated. For example a customer advises earnings of $500 per fortnight however the Service Officer codes $50 per fortnight

The date of effect of an unfavourable determination may be earlier than the date of the determination. The cancellation or rate reduction under the Social Security (Administration) Act 1999, decides the date of effect for debts resulting from:

• system error
• administration error

Do not raise a debt if:

• an incorrect payment was issued due to system or administrative error, and
• the customer had not been informed they need to report an event change or change in circumstances

See the inter-relationship between the Social Security Act 1991:

• section 1223(1), and
• subsections 1223(1AC), (1AD) and (1AE)

In this situation, subsection 1223(1AD) has 3 requirements:

• the payment was incorrect because of the occurrence of an event change or change in circumstances, and
• the agency was not notified of the event change or change in circumstance, and
• a valid notice did not get issued

If the debt start and end date is before 1 July 2001:

• DMIS registers it as a 'Qualification' debt, and
• the debt is raised under the old section 1223(1)

If the debt end date is on or after 1 July 2001:

• DMIS registers it as a 'Person not entitled to Payment' debt, and
• the debt is raised under the new section S1223(1)

See Create a new debt record manually on the Debt Management and Information System (DMIS).

• Raise debts starting from 1 July 2001 under the new provisions
• Record debts in DMIS that cover payments made before and after 1 July 2001. These are under the new section as 'S1223(1)'