New Zealand Agreement debt recovery - action for International Services (CIS) 107-05080080

Under the terms of the New Zealand Social Security Agreement, when a customer has incurred an income support debt with one country and is not in receipt of an ongoing payment from that country but receives an ongoing payment from the other country, the debt may be recovered by the other country upon request.

A different procedure applies to debts recovered by embargo process under the Agreement.

Historically, there were 3 general debt recovery arrangements:

• Australia recovered debts owed to New Zealand via withholdings
• New Zealand recovered debts owed to Australia via withholdings, and
• New Zealand recovered debts owed to Australia via lump sum, from a Special Banking Option (SBO) account

From 1 May 2020, New Zealand no longer recovers debts owed to Australia via withholdings. Recovery from a SBO account is still permitted.

Debt Certificates are sent between New Zealand and Australia via secure electronic liaison to request recovery under the Agreement. The Debt Certificate must certify that the requested recovery meets the agreed terms and conditions (see below).

If a debt meets the agreed terms and conditions, and the agency is going to recover it on behalf of NZ via withholdings, we use regular debt recovery processes, that is, withholdings via the Debt Management and Information System (DMIS), and the standard rate of recovery applies. However, if requested by the customer, a minimum rate of recovery of AUD20 per fortnight may be accepted without need for further investigation or evidence. Customers may also make cash repayments.

Notes: debts being recovered for New Zealand must not be referred to a collection agency.

Only social security law payments are covered by the Agreement. Australian family assistance and student assistance debts (for example FTB and AUSTUDY) cannot be recovered from NZ payments and NZ debt recovery amounts cannot be withheld from Australian family assistance payments.

For Special Banking Option recovery, the customer must have been paid into a Special Banking Option account for the entire period of the debt.

For recovery via withholdings, the original debt amount must be more than AUD400 and first found to be owing within the 5 years immediately prior to the debt recovery request.

The office that originally created the debt is responsible for any query about why the debt occurred including any appeals or reviews. That is:

• the New Zealand debt authorities are responsible for explaining why a debt of NZ pension occurred and for appeals against that decision, and
• Services Australia is responsible for explaining why a debt of Australian pension occurred and for any appeals against that decision

Staff in CIS are responsible for all actions associated with the request and recovery of these debts including:

• liaison with New Zealand
• customer requests about the rate of recovery
• reconciliation of amounts that have been recovered

Schedules detailing individual amounts withheld for each customer are sent between Australia and New Zealand via secure electronic liaison on a monthly basis. For amounts:

For more details on handling the monthly reconciliation process, see New Zealand Agreement debt recovery reconciliation – action for International Services (CIS).