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Tuesday, 10 August 2004
Page: 26001

Senator PATTERSON (Minister for Family and Community Services and Minister Assisting the Prime Minister for the Status of Women) (3:02 PM) —Senator Harris asked me a question without notice yesterday regarding Centrelink's pursuit of an overpayment which had been waived by the Administrative Appeals Tribunal. I can assure Senator Harris that in this case the proper legal processes have been followed at all times. I think Senator Harris has misunderstood the situation he raised in the Senate yesterday. The debt being pursued by Centrelink had not been waived; it had been written off by the Administrative Appeals Tribunal. The difference is that a waived debt is one on which no further recovery action occurs. A written off debt, as in this case, is one on which no immediate recovery action occurs, because the customer does not have the capacity to repay the debt at that time. Recovery can occur once the circumstances allowing for debt recovery change.

I have been advised that this was made clear in the tribunal's decision and to the legal representatives of the customer concerned. The Administrative Appeals Tribunal affirmed that the customer had been paid an age pension to which he was not entitled, as he had exceeded the allowable assets threshold. Prior to this, the customer had used all appeals mechanisms available to him, and in each instance the decision had been affirmed. Records show that the customer had been contacted on several occasions while he was on age pension and that he had failed to update his circumstances until this was brought to Centrelink's attention five years ago. The Administrative Appeals Tribunal recognised that the customer had no capacity to repay the debt at that point in time, so the debt was written off until the customer or his estate had the capacity to pay.

This ruling was in accordance with section 1236 of the Social Security Act 1991 and with the government's policy of not placing people in financial hardship when recovering overpayments. When a customer's circumstances change, there may be a settlement. For example, after the customer dies Centrelink can contact the executor or surviving parties and negotiate a settlement. If there is no response, Centrelink can commence legal action. In this case, Centrelink was required to commence legal action. Subsequently, the executor agreed to a settlement.

The Howard government are committed to ensuring that people receive their correct entitlements under social security law and repay any outstanding overpayments. However, we do not want people to be put under hardship and we will negotiate suitable arrangements for them to repay their debts. It is imperative that customers advise Centrelink of the full details of their circumstances when they apply for payment and that they advise it of any changes in these circumstances to ensure that they receive the right payment and do not incur an overpayment.