Payment arrangements 107-05040000

A debt is due for payment 28 days after the date of issue on the Account Payable letter.

When a customer cannot pay their debt in full, they can enter into a payment arrangement.

One payment arrangement covers all debts. The customer does not need to enter into a separate payment arrangement for each debt. Debt recovery staff should try to negotiate a cash arrangement before looking at other recovery action such as a garnishee.

Customers with a payment status of Current Zero Rate (CZR) are ‘non-current’ customers for debt recovery purposes. Withholdings do not apply to these customers. They must enter a cash arrangement.

Entering into a payment arrangement will not cease all other recovery action. See the Resources page for more details.

Cash payments arrangements allow former customers to pay their debts.

A cash arrangement can be Irregular (IRR), Regular (REG) or a combination of both. IRR payments are one off and do not usually follow a pattern. This may include a lump sum payment or large payments of different amounts or frequency. A REG payment follows a pattern of the same amount at the same frequency. For example, $100 per week every Monday.

To negotiate and code a cash arrangement, see Arranging cash repayments to recover debts.

Do not cease a withholdings arrangement to enter into a cash arrangement. The withholdings arrangement will automatically restart the next day. See Withholdings to make a withholdings arrangement.

A direct debit deducts money from the customer’s bank account. The customer must own the account and approve the deduction.

To negotiate a direct debit arrangement, see Arranging cash repayments to recover debts.

To code a direct debt, see Voluntary Deductions (direct debit) arrangements to recover debts.

Staff must not raise the subject or offer a discount to a customer. The customer must ask for a discount. If a customer can afford to pay their debt in full, do not discuss or accept a discount arrangement.

To negotiate and code a Discount arrangement, see Discounting arrangements for recovery of debts.

Customers may choose or require other payment arrangement types and methods, for:

• Withholdings arrangements, see Withholdings
• Online customer arrangements online, see Money You Owe
• garnishee arrangements, see Garnishees
• Organisations, other Government Departments, Assurance of Support etc, see Unique recovery action

An arrangement breaks when the Agency does not receive a scheduled payment by the due date. For cash and discount arrangements, this is 14 days after the payment due date. For a direct debit, this is about three days after the Reserve Bank rejects/returns the transaction.

The status of the arrangement will change from current (CUR) to broken (BKN). An activity will generate on the customers record and assign to debt recovery staff through Customer First Workload Manager (WLM).

For a broken:

• Cash arrangement, see Actioning broken regular/irregular cash arrangements
• Direct Debit, see Actioning broken voluntary deduction (direct debit) arrangements
• Discount arrangement, see Actioning broken discount arrangements

A no arrangement activity will generate when the debt balance is over $1,500.00 or the customer is deceased, and:

• the debt is due and payable with no arrangement put in place
• a broken (BKN) arrangement is ceased
• the temporary write off period expires
• the current arrangement is cancelled with no new arrangement/write off in place
• a waiver is reversed on a fully repaid/waived debt
• a fully repaid debt is amended to have a higher balance
• any write off is manually ended with nothing else coded in its place

All no arrangement activities are actioned the same way. See Outbound customer contact and gathering information when recovering debts.

A customer can request a review of an arrangement at any time. If the agency wants to review an arrangement, the customer must receive 28 days’ notice, except if the customer has not disclosed details about their true capacity to pay their debt.

See Reviewing cash arrangements or Withholdings for reviewing withholdings arrangements.

On occasion payments made by the customer may not display on their record. This can occur for many reasons. To locate missing payments, see Debt repayments not on the customer's record.

A customer can request to skip a payment on occasion. This can be before or after an arrangement breaks. Skipping a payment/s on a broken regular arrangement will change the status from broken (BKN) to current (CUR). See Updating payment arrangement schedule.