Recovery Fee applied to debts resulting from incorrect declaration of income 107-05100040

Customers in receipt of a working age payment, who incur a debt due to income from personal exertion, may have a Recovery Fee applied if they:

• refused or failed to provide information about their income from personal exertion, or
• knowingly provided false or misleading information about their income from personal exertion, when required to do so under Social Security Guide, see the References page

Debts with the following reason codes can have the Recovery Fee applied:

• IES - Own earnings undeclared/coded
• ISI - Own earnings wrongly declared/coded
• UCE - Undeclared cash earnings (customer's portion only)
• ISA - Own earnings incorrectly declared (OCI) (auto)
• ICA - Income combined (OCI) (auto) (customer's portion only)

The Recovery Fee:

• must be separate from the decision to raise the debt
• must be considered at the time the debt is raised
• is part of the debt and recovered under the same provisions
• cannot be applied after the debt has been raised
• cannot be applied without contacting the customer
• appears separately on the Account Payable

The Debt Management and Information System (DMIS) will automatically calculate the amount of the fee.

Do not apply a Recovery Fee if the customer:

• has reasonable evidence supporting why they under-declared income from personal exertion
• has a reasonable excuse for failing or refusing to provide information, or
• can show their incorrect declaration of income was not made knowingly or recklessly

A customer may have already provided enough evidence to decide the fee should not apply. If this is the case, no further contact is needed.

Waiver may be more appropriate than recovery. The Recovery fee only applies to debts to be recovered, including debts temporarily written off.

Normal review and appeal processes apply to the application of the Recovery fee. The Recovery fee may be set aside even if the debt decision is affirmed. If a debt is set aside after a review, the Recovery fee is set aside as well.

The application of the fee does not affect the payment summary or tax adjustments.

Where a potential debt is identified for non-declaration or under-declaration of income, a letter is sent. The letter asks for confirmation of their employment income online within 28 days. The Recovery Fee:

• is applied if a debt arises
• is not applied if the customer provides a reasonable excuse for refusing or failing to provide the information

The Recovery fee is not applied, until the person has been contacted.

The Recovery Fee will not apply to partner income even if the partner income is incorrectly declared or not declared.

If members of a couple have partner (joint) income above the income free area, the fee will be calculated for the part of the debt that occurred because the person incorrectly declared their income from their own personal exertion.