Small debt waivers 107-05120020

From 20 March 2026, the small debt waiver threshold increased to $250 with ongoing Consumer Price Index (CPI) indexation on 1 July each year.

The small debt waiver provisions apply to debts arising under one of the following authorities, and the total calculated debt amount is less than the small debt waiver threshold:

• Social Security Act 1991
• A New Tax System (Family Assistance) (Administration) Act 1999
• Paid Parental Leave Act 2010
• Student Assistance Act 1973, and
• Social Security (Administration) Act 1999 (Income Management debts)

These provisions do not apply where the outstanding balance of a debt is less than the small debt waiver threshold.

Debts equal to or above the small debt waiver threshold should be raised, unless other waiver provisions are applicable.

IM debts under the Social Security (Administration) Act authority, less than the small debt waiver threshold are eligible for waiver under the small debt waiver provisions in the Social Security Act.

A customer cannot receive an Advance payment while owing a debt to the Commonwealth. If a customer requests an advance and a small amount is still outstanding staff do not waive the balance:

• the debt cannot be legally waived
• the customer can pay the remainder of the debt to allow approval of the new advance

The system may automatically waive small debts for certain payment types. Debts that require further investigation or actions will require manual action. For example, see Cancellation of Pensioner Education Supplement (PES) and ABSTUDY PES. Generally for the system to waive a small debt, the debt will need to meet 3 criteria:

• a reassessment produces a 'negative adjustment'. See the:
• Entitlement (ELD) screen in Process Direct
• Assessment Results (AR) screen in Customer First/Customer Record
• the debt is not for Family Tax Benefit (FTB), Paid Parental Leave (PPL) or Child Care Subsidy (CCS), and
• the amount is under the small debt waiver threshold

If a customer's payment is cancelled and they have an outstanding advance loan balance, the system will automatically:

• waive amounts less than the small debt waiver threshold, and
• raise amounts equal to or above the small debt waiver threshold

After FTB reconciliation occurs, any total calculated reconciliation debt confirmed to be under the small debt waiver threshold is automatically waived. Manually action small FTB amounts if they are generated outside of the reconciliation process (see below).

A debt recalculation may include a period for a previously waived debt (for example, because it was under the small debt waiver threshold). See Reversal of waivers.

Waivers, like any other decision, can be reviewed and changed if the original decision was incorrect.

When waiving an undetermined debt under the small debt waiver threshold, no Recovery Fee is applied. For determined debts with an existing recovery fee, if the debt amount changes to less than the small debt waiver threshold, the recovery fee should be recalculated at 10% of the new debt amount.

A small debt waiver can only apply if the total debt amount inclusive of the recovery fee is less than the small debt waiver threshold.

Note: there is no requirement to record the legislative reason for a waiver on a DOC when the waiver is automatic. This is contained in Section 6A of the Social Security (Administration) Act 1999.

A debt under the small debt waiver threshold may be manually added (via the Add Debt (OPAD) screen). The Debt Management and Information System (DMIS) will automatically waive the debt with the small debt waiver reason code SDW.

Record the details on a DOC as per minimum DOC standards for debt waivers.

If a customer pays the balance of all outstanding debts (including any interest payable), the residual interest calculated for the final period will waive automatically if it is less than the small debt waiver threshold.

For example, when a debtor has paid their debt in full, and the final residual interest is:

• less than the small debt waiver threshold, the system will automatically waive it
• more than the small debt waiver threshold, the system will create a Manual Follow-up (MFU) for Debt Recovery staff. The customer is contacted to recover the residual amount outstanding

An FTB debt less than the small debt waiver threshold can only be waived if it is a qualification debt.

In Customer First, if a 'negative adjustment' less than the small debt waiver threshold is created for FTB, the screen flow will go from the Assessment Results (AR) screen to the Assessment Consequences (ASC) screen.

Once on the ASC screen, before finalising the reassessment activity, staff must code:

• WVD to waive the debt if it relates to qualification, or
• INV or CAL to create an undetermined debt to finalise no debt using reason code FAM if it does not relate to qualification. The amount is included in reconciliation

Do not apply a recovery fee when waiving a working age payment debt less than the small debt waiver threshold . This is for debts with a debt reason of:

• IES (own earnings undeclared/coded)
• ISI (own earnings wrongly declared/coded), or
• UCE (undeclared cash earnings (customer portion only):
• recalculate the recovery fee if changing the amount of a determined debt below the small debt waiver threshold
• see Recovery Fee applied to debts resulting from incorrect declaration of income

There is no legislative basis to waive PGPA debts.

The PGPA replaced the Financial Management and Accountability Act 1997 (FMA) from 1 July 2014.

Referral to Services Australia social workers within Payments and Integrity may be appropriate. They provide support to customers who are:

• vulnerable 'at risk'
• have complex needs, or
• have barriers to economic and social participation

The additional problem of managing multiple debts from Services Australia and other institutions can be overwhelming. This can result in a greater risk of non-compliance. See Social workers' role in debt, payment assurance and compensation.