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Wednesday, 6 May 1987
Page: 2390

Senator COONEY —My question is directed to the Minister representing the Minister for Social Security. Does the Department of Social Security have in operation any practice of appropriating funds from social security recipients allegedly in debt to it without a court order? If so, what is the legal basis for that practice? Does the Department have what is called a recall system? If so, what is it?

Senator TATE —Yes, the Social Security Department does have in operation a practice of obtaining funds from social security recipients allegedly in debt without a court order. This is by way of withholding from pensions, benefits and allowances, and by recall. The legal authority for withholding is contained in sub-section 140 (2) and for recall in sub-section 135td (3) of the Social Security Act 1947, with which I am sure Senator Cooney, or at least his spouse, will be very familiar.

The Social Security Act 1947 empowers the Department to recall moneys exceeding the amount payable under the Act that have been credited to a pensioner's, beneficiary's or allowee's account. Under agreement with the Australian Bankers Association, a recall from a savings account will not be made once the payment has been entered in the passbook. This restriction does not apply to credit union or building society accounts. Recall action is taken under one of the following categories: Direct credit to an account continues after the person's death-recall only with next of kin's consent; whole or part payment is in excess of the person's entitlement; a person requests immediate payment but payment has already been direct credited, in which case that again occurs with the person's consent.

A requirement of the Social Security Act is that the client and the financial institution be notified in writing that an amount is to be recalled. Where payment is made to a client by cheque and recovery of that payment is necessary, a stop payment is placed with the financial institution concerned. If effective, this action prevents the client from cashing the cheque. If not effective, an overpayment would be raised and recovery would be in the normal manner; that is, refund or limiting the client's payment.