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

This document provides information about the application of a 10% Recovery Fee. This applies for debts of working age payments.

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Incorrect declaration of income

Applying a Recovery Fee

Incorrect declaration of income

Table 1

Step	Action
1	Debt Action script Process undetermined debts using the Debt Action script.
2	Make a decision about the undetermined debt shell If the debt is to be raised and: recovered, go to Step 3 waived, this procedure does not apply. Go to Debt investigation
3	Check Working age payments See the Resources page for list of affected payments. Is the debt for a working age payment? Yes, go to Step 4 No, procedure ends here
4	Income from personal exertion Income from personal exertion includes income received as an employee or for services rendered. For the definition of 'personal exertion', see the References page. The reason codes are: IES, income earnings not declared/coded (self) ISI, income earnings wrongly declared/coded (self) ISA, income incorrect earnings auto code (self) UCE, income undeclared cash earnings ICA, income combined (OCI) auto code (customer’s portion only) Apply the Recovery fee to the part of the debt directly related to a customer's income from personal exertion. Note: the Recovery Fee cannot be applied to auto codes. See the Resources page for examples. Is all or part of the debt due to income from personal exertion? Yes, go to Step 5 No, see Table 2 > Step 2
5	Evidence available to support a decision not to apply a Recovery Fee Has the customer already provided information about why they did not correctly declare their earnings? Yes, issue the Q175 warning letter. Go to Table 2 > Step 2 No, go to Step 6
6	Contacting the customer Contact the customer to discuss why they did not declare their income. For the definition of reasonable excuse, see References > Policy page. Does the customer have a reasonable excuse for failing or refusing to declare their income? Yes, see Table 2 > Step 2 No, go to Step 7
7	Customer unable to be contacted Before a Recovery Fee is applied, contact the customer: go to the Recovery Fee (OPRF) screen: issue an 'Invite to Contact' letter (this requests a response within 21 days) record date letter issued add the keyword FEEDEC (awaiting Recovery Fee decision) to the activity resubmit the activity for 21 days. For remote customers resubmit for 28 days. See Allow extra time for surface mail delivery create a manual follow up (MFU) to suspend the record after 21 days (28 days for a remote customer) if there is no reply activate a review 14 days from the date of suspension to cancel the record if there has been no contact from the customer Note: use the keyword RSDBTFEE (raise debt - 10% Recovery Fee to apply) to hold debts awaiting future calculation. Suspended records are considered current until they are cancelled. Is the customer current? Yes, go to Step 8 No, go to Step 9
8	Current customers If the customer: responds, see Table 2 > Step 1 does not respond, suspend payment until they respond, using code RFR (failed to reply to Recovery Fee letter) Where customer contact: is made after the payment has been suspended, assess for restoration of payments. See Table 2 > Step 1 does not occur within the next 14 days, payments will cancel. Go to Step 9
9	Non-current customers Payments that have been cancelled and a debt raised, must have the warning letter (Q175) issued. If a non-current customer: responds: within the stated time, see Table 2 > Step 2 after 21 days (28 days for a remote customer), before raising the debt, apply the fee (if applicable). See Table 2 > Step 2 does not respond to the 'Invite to Contact' letter, raise the debt. Do not apply the Recovery Fee. Issue a warning letter

Applying a Recovery Fee

Table 2

Step	Action
1	Determine whether to apply the fee When the customer contacts: advise them of a possible debt discuss their understanding of their obligations to advise the agency of their income discuss the reasons the customer failed to declare or under-declared their earnings explain how the customer should declare income correctly in future discuss the decision with the customer If the customer says there are personal issues, consider contacting the social worker. Determine if the customer failed or refused to declare their income from personal exertion without a reasonable excuse, or if they 'knowingly' or 'recklessly' provided incorrect information. See Reference > Policy for the definitions of 'knowingly' and 'recklessly'. Go to Step 2.
2	Raise the debt Record details of the debt on the Modify/Assess Debt (OPMA) screen. The screen flow will go to the Component Amounts (OPCA) screen. Code the component amounts. All the components must equal the debt total. Is the fee to be applied? Yes, go to Step 4 No, go to Step 3
3	Recovery fee does not apply Record the decision in the Reason field on the OPRF screen, see the Resources page for codes: if the customer did not provide correct information about their income, send a Q175 warning letter record details on the OPRF screen document reasons for the decision on a DOC. Include details of verbal warnings press [Enter] to confirm the details Go to Step 5.
4	The Recovery Fee will be automatically calculated The Recovery Fee is automatically calculated. Note: the Recovery Fee amount may require a manual recalculation in certain circumstances. If the Recovery Fee details are: applied and confirmed, code the Reason field as RFA (Recovery Fee applied) and press [Enter] not confirmed, key the manually calculated Recovery Fee amount and code the Reason field as appropriate, see the Resources page for valid codes press [Enter]
5	The Recovery Fee (OPRF) screen will be displayed The OPRF screen shows: whether or not the first request letter was sent and the date it was sent (if applicable) employer details the Customer Contact Date (this is a compulsory coding field if the fee is applied) if a warning letter was sent the Reason field for applying or not applying the Recovery Fee the amount of eligible debt the Recovery Fee applies to - in the Elig AMT field the amount of debt which did not result from income from personal exertion - in the Other Circumstances Debt Amount field the Recovery Fee amount that has been applied - in the Rec Fee field the Recovery Fee amount as automatically calculated - in the System Estimate field The Recovery Fee also displays on the General Information (OPGI), Modify Amount (OPMA) and Account Payable (OPAOD) screens. If there are variations made to the debt amount via the Debt Amount (OPDA) screen: recalculate the Recovery Fee manually calculate the eligible debt amount using a debt calculation tool the eligible debt amount on the OPRF screen with the reason code RDA Apply this process even if a portion of the debt has been waived. Change the Recovery Fee amount on the OPRF screen in the same activity. Use the Debt Action script.
6	The Account Payable (OPAOD) screen The screen flow goes to the Account Payable (OPAOD) screen: send an automatic Account payable letter, or if required, suppress the automatic advice and issue manual advice See Sending Account Payable letters.
7	The Activity Finalisation (OPAF) screen The screen flow goes to the Activity Finalisation (OPAF) screen: key Y in the Finished? field record details on a DOC