Recovering debts from a deceased customer's estate 107-05090020

Outstanding debts on a deceased customer's record become the liability of the estate. Another person may be liable for the debt where:

• the executor has been negligent in their distribution of the estate
• a third party is identified as having received a payment intended for the customer

Investigate these cases further. The debt may need to be raised against the liable person.

If pursuing recovery of a debt on a deceased customer's record:

• do not accept payment of a debt from any source other than the deceased customer's estate
• do not, under any circumstance, pursue or accept ongoing repayment arrangements (including third party withholdings) from a third party for a deceased customer's debt
• do not garnishee a financial institution account/s belonging to a deceased customer's estate
• recover a deceased customer's debt through Families debt offsetting

Permanently write off a debt on a deceased customer's record if:

• it is under $200, because recovery action is not cost effective, or
• there is no estate or there are insufficient funds in the estate to pay the debt

No estate or insufficient funds in the estate

Permanently write off a debt due to no estate or insufficient funds in the estate when:

• an executor or third party notifies there is no estate
• an executor or third party notifies the estate has been distributed and there are insufficient funds remaining in the estate to pay the outstanding debt/s if they were not aware of the debt period prior to distribution of the estate assets
• the estate has partially repaid the debt and the executor, or third party notifies there are insufficient funds remaining in the estate to pay the balance
• the executor or any assets/property are unable to be located

Not cost effective

Permanently write off a debt where it is not cost effective to recover. This is when:

• the outstanding debt balance is less than $200, and
• a new debt is raised, it is under $200 and there are no other outstanding debts, or
• the outstanding debt balance is less than $10,000 and reasonable efforts have been made to recover the amount from the estate

Note: if it is not cost effective to recover an outstanding debt, write off the debt using permanent write off code Deceased Insufficient Estate. See Permanent write off of Centrelink debts.

Do not contact the executor or third party (verbal or written) until 4 weeks have passed since the customer's death. Exercise sensitivity when always discussing a debt with an executor or third party.

If the deceased customer identified as Indigenous, before contacting the executor or third party see:

• Cultural considerations when someone dies, and
• Indigenous naming conventions

Notify the executor by telephone and in writing of any:

• outstanding debts raised against the customer before they passed away, including any interest
• new debts raised after the customer passed away
• amendments made to an outstanding debt because of reassessment or review

Note: executor details must be recorded on the Death and executor information (DEA) screen in Process Direct or Death/Executor (DEA) screen in Customer First. The proof sighted must be recorded on a DOC before Services Australia can complete debt recovery action.

If the executor is unknown, prepare an advice of account addressed to the executor, and mail to the next of kin or the customer's last known address. Consider if executor or notifying third party needs Social Worker support.