Recovering debts from organisations 107-05090060

Organisations may have the below debts:

• ABSTUDY
• Assistance for Isolated Children (AIC) Scheme
• Parental Leave Pay (PPL)
• Family Tax Benefit (FTB) payments to an Approved Care Organisation (ACO)
• Assurance of Support (AoS) payment where the assurer is an organisation
• Third Party Organisation (TPO) payments

Services Australia does not pursue recovery of the below debts:

• Child Care Assistance (CCA), and
• Child Care Benefit (CCB)

A small number of organisations have arrangements with the agency. These will continue until they pay the debt, or break the arrangement. See Resources page for more details.

There are 3 main methods used to recover an organisation debt:

• Cash repayments
• Withholding from Centrelink payments (for ACO only)
• Legal proceedings

Not all methods apply to each organisations.

Do not use garnishee action to recover an organisation debt unless it forms part of legal proceedings (civil recovery). The Litigation Team will decide if the agency starts civil procedures to recover debts. Refer cases to an APS5 or above in the Specialised Recovery Team (SRT).

Consider the daily operation of the business. Any recovery action taken must not:

• put the business at risk or
• have a negative effect on its staff, customers or students

Paid Parental Leave (PPL) debts

PPL employers get a separate reference number on each Account Payable Notice. This allows an employer to make individual debt payments.

Manual intervention is required when employers pay multiple debts using one reference number. This requires moving money from one debt to another.

Employer payments made by EFT and cheque require manual receipting via ESSentials.

All other debts

When an organisation has more than one debt, the debt repayment hierarchy determines the recovery order.

Organisations may make a payment for a specific debt. The debt repayment hierarchy can allocate this payment to another debt. This will require manual intervention to move the funds to the intended debt.

Communicating with organisations should be via one of the below:

• phone
• fax
• mail correspondence

Debt Staff can use PGP secure webmail when these methods are not successful or suitable.

See General Centrelink debt recovery information.

Organisation debts relate to employees, students or customers. Debt Staff can only release certain information from the organisation record. This includes:

• the individual's name
• dates of the debt
• reason for the debt

Recovery options are limited after the sale or change of ownership. A debt cannot be transferred to another person or organisation to pursue recovery. Liability for the debt stays with the organisation who received the payment.

An exception is where the legal entity name is also the individual’s name.

If the organisation entity name:

• is the individual’s name, for example John Smith, pursue recovery through the individual
• includes the individual’s name, for example John Smith Painting, do not pursue recovery through the individual

The debt must remain on the organisations record and not move to an individual’s record. Exercise extreme caution to identify the correct individual as the business owner.

In rare circumstances, an individual who commits commonwealth fraud through the organisation may become personally liable for a debt. The Litigation Team will decide if the agency starts civil procedures to recover debts. Refer cases to an APS5 or above in the Specialised Recovery Team (SRT).

Do not offer a discount to an organisation that can afford to pay their debt.

A discount may be suitable when an organisation is having ongoing financial problems and insolvency or bankruptcy is pending.

See Discounting arrangements for recovery of debts.

Debt Staff may waive or write off a debt if the organisation:

• requests an interest charge waiver due to special circumstances
• is experiencing short term solvency hardship
• declared bankruptcy or insolvency
• changed owners or ceased operation

See Non recovery of organisation debts.

The IC is an incentive for organisations to repay their debt. They must have an outstanding debt and not be making repayments.

An automatic exclusion applies to:

• Approved Care Organisations (ACO) when receiving FTB
• Assurance of Support (AoS) debts with an Assurance of Support Bank (ASB) debt reason

See Interest Charge (IC) for Centrelink debtors no longer receiving payments.

Paid Parent Leave (PPL) debts

PPL employers cannot request a review of a debt raising or debt recovery decision.

See Parental Leave Pay (PPL) employer initiated reviews and appeals.

ABSTUDY and Assistance for Isolated Children (AIC) debts

Organisations with an ABSTUDY or AIC debt can request a review of:

• Entitlement and eligibility decisions
• Debt recovery decisions

Note: do not use the Internal Review/Explanation script to record a review. Record the reason the organisation does not agree with the decision on a DOC and send to the ABSTUDY team.

See: Review of ABSTUDY and AIC Scheme decisions

Other organisations

Follow normal reviews and appeals process for all other organisation debts. See Initial contact about a decision and the review of decision process for all other debts