Waiving Centrelink debts 107-05120000

Debt Staff have the required system access to perform debt related functions, such as running the Debt Script.

Non-Debt Staff required to perform a debt related action need the appropriate security access. See the Resources page of General debt raising information.

A debt must be legally recoverable for a waiver consideration to take place. Consider a waiver if:

• a customer (or their nominee) asks for one, or
• other factors show that waiver may apply

Test all relevant waiver provisions.

Waive a debt partially or in full. A full or partial debt waiver can occur at any time during a payment period.

Waiving a debt affects any recovery fee and interest charges applied to the debt.

A decision made to waive a debt or part of a debt includes the 10% recovery fee (if applied).

Where appropriate:

• remove the fee, or
• recalculate the fee if only waiving part of the debt

See Effect of waiving a debt on the recovery fee.

Apply the same waiver reasons and provisions that currently exist for debts.

The system will:

• waive the Interest Charge (IC) component
• refund the customer where an IC is later waived or adjusted
• recalculate the interest payable when a debt is waived
• adjust the record via overnight processing

Under current legislation, IC is a debt. Manage recovery and over-recovery in the same way as existing over-recovered debts.

See Transfers and refunds.

A person aged under 16 may qualify for a Centrelink payment with or without responsibility of an adult. For the purposes of investigating a Centrelink debt, a person is considered a minor if they are under 16 years of age at any time during the debt period.

All waiver provisions should be assessed for customers aged under 16 at any time during the debt period. Consider each customer's individual circumstances.

If a customer under 16 says they are not living with a parent or guardian, they must always be referred to a social worker. See Assisting a customer aged under 16.

It may be appropriate to refer a customer to social work services.

Social workers support vulnerable 'at risk' customers. They may have complex needs and barriers to economic and social participation. Managing multiple debts can be overwhelming for customers. There is a greater risk of non-compliance.

When servicing customers who have experienced psychological trauma, consider the various impacts of the condition on their ability to comply, including their capacity to attend appointments.

Customers may attend appointments with a support person of their choice. For example, a relative, friend or an advocate from a disability, mental health, or community organisation.

See Social workers' role in debt, payment assurance and compensation.

If a customer is an active bankrupt, waiver provisions in Part 5.4 of the Social Security Act 1991 and Part 4, Division 4 of the A New Tax System (Family Assistance) (Administration) Act 1999 cannot be applied to any debts that are provable in bankruptcy (debts incurred before the date bankruptcy commences). This is because the Commonwealth’s right to recover the debt is replaced by a right to prove in the bankrupt estate, along with other creditors.

Further, if a customer is an active bankrupt, they may not be able to seek review of debt decisions in the Administrative Review Tribunal (ART). This is because the customer is no longer personally liable for the debt. It is open for the customer’s bankruptcy trustee however to seek review of debt decisions in the ART, as part of administering the bankrupt estate.

The situation will be different if a decision has been made that a debt has been incurred by fraud, as discharge from bankruptcy will not release the customer from their liability to repay the debt. In this case, waiver provisions will be open to consider after discharge from bankruptcy and the customer will still be able to seek review of debt decisions in the ART.