C17/2002 Recovery of certain moneys from financial institutions paid after death | Compensation and Support Reference Library, Departmental Instructions, 2002

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C17/2002 Recovery of certain moneys from financial institutions paid after death

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DATE OF ISSUE:  9 MAY 2002

Recovery of certain moneys from financial institutions paid after death

Purpose

This departmental instruction provides procedural information relating to recovery of outstanding moneys from a financial institution after the death of a pensioner.

This instruction supersedes Stateline (TRIM reference 0210918E) distributed on 21 February 2002 regarding debt recovery from financial institutions after the death of a pensioner.

Background

Effective 1 July 2001, a range of legislative amendments to the Veterans' Entitlements Act 1986 (VEA) debt recovery provisions occurred (DI C08/2001, Enhance Debt Recovery dated 22 June 2001 refers).

As part of those amendments a new section 205AB was inserted into the VEA (see Attachment B of Attachment A - “Refund of $ - Fin Inst”).

Under subsection 205AB(2), the Commission may recover from a financial institution, any payments of pension, benefit or other pecuniary amount paid.  A written notice must be issued by the Commission to recover such a debt.

Background, continued

The recovery action is applicable to any account/s either in the deceased pensioner's name alone or in a joint account in the name of the deceased pensioner and any other person.

A subsection 205AB(2) notice to a financial institution for return of funds in respect of a debt owed to the Commonwealth by the deceased must be in writing.

Standard Letters

Standard letters relating to the initial 205AB recovery action have been created.  There are two standard letters under the “Bereavement” tab to use when recovering moneys after the death of a pensioner:

  1. The first letter is to send to the appropriate financial institution to recover outstanding moneys (see Attachment A “Refund of $ - Fin Inst”).
  2. The second letter is to send to the deceased estate.  This letter provides details of the amount of the debt, how the debt arose, and the method of recovery (see Attachment B “Refund of $ Fin Ins – advice to estate”).

Compliance

Subsection 205AB(3) provides for the imposition of a penalty if a financial institution fails to comply with a notice under 205AB.  These penalties are imposed in accordance with 4AA of the Crimes Act 1914 (refer to step 3 in the table below for case referral when non-compliance occurs).

Procedures

State Office Procedures

The following table outlines the steps that should be undertaken when recovering moneys from a financial institution after the death of a pensioner:

Step

Action

1

Send Standard letter “Refund $ - Fin Inst” to the appropriate financial institution requesting that it repays the amount outstanding to the Receiver of Public Moneys within 14 days.  The amount of money to be repaid is the lesser of the following amounts:

  • amount of overpayment; or
  • the balance of the account.

2

Send standard letter “Refund $ Fin Ins – advice to estate” to the deceased estate as soon as possible explaining:

  • why recovery action is being taken; and
  • how much is being recovered.

3

If the financial institution does not comply within 14 days of the initial written request under section 205AB of the VEA, then refer the case to the Fraud Control Unit for further action:

Tony Walsh, Director

Fraud Control Unit

21st Floor

PO Box 21

WODEN  ACT  2606

Contact Officer

If you have any enquiries relating to this topic, please contact Kerry-Anne Cloutt on (07) 3223 8452.

ROGER WINZENBERG

Branch Head

Income Support

9 May 2002


Attachment A – Copy of Standard Letter “Refund of $ - Fin Inst”

1234567

NATIONAL OFFICE

Dear

Recovery of Commonwealth Moneys Paid to Deceased Pensioner

Pensioner's Full Name

Date of Death

Account Number

The above named was in receipt of a payment from this Department credited to the above account at your branch.

This Department has been informed that       died on      .  As this information was only recently provided to this Department, it was not possible to prevent payments forwarded for paydays (insert date) from being credited to the above account number.  As a result an amount of $(amount overpaid) has been overpaid.  This money represents a debt to the Commonwealth and is recoverable under s205AB of the Veterans' Entitlements Act 1986.

Please pay the Receiver of Public Moneys within 14 days the lesser of the following amounts:

  • amount of the overpayment being $     ; or
  • the balance of the account.

If the account has been closed, or there are insufficient funds held in that account to cover the full amount of the overpayment, please advise the name and address of the person or firm to whom the proceeds of the account were paid, and the date on which the account was closed.  This information is requested under section 128 of the Veterans' Entitlements Act 1986.  A copy of this section is enclosed in “Attachment A”.

You should treat this letter, as a recall of funds not entitled to form part of the estate.

Your reply or return of funds within 14 days is requested.

Please note that if you do not repay the money, your financial institution may be in breach of the Veterans' Entitlements Act 1986 and vulnerable to criminal prosecution under the Crimes Act 1914.  This request is made pursuant to section 205AB of the Veterans' Entitlements Act 1986.  A copy of this section is enclosed in “Attachment B”.

Should you have any queries regarding this letter please contact me on       or fax me on      .  You will need to quote the Reference Number (insert reference number).

If you are calling from outside the metropolitan area, please dial our FREECALL number shown at the bottom of this letter.

Yours sincerely

Delegate of the Repatriation Commission

      <e>>


Attachment A

Section 128 of the Veterans' Entitlements Act 1986:

Secretary may obtain information etc.

(1)      The Secretary may, for the purposes of this Act, by notice in writing given to a person (including a person employed in or in connection with a Department of the Government of the Commonwealth, of a State or of a Territory or by any authority of the Commonwealth or of a State or Territory), require the person:

(a) to:

(i) provide the Department, or an officer specified in the notice, with such information as the Secretary requires; or

(ii) produce to the Department, or to an officer so specified, any documents in the custody or under the control of the person;

within the period (not being less than 14 days after the notice is given) and in the manner specified in the notice; or

(b)  to appear before an officer specified in the notice at such reasonable time (not being a time earlier than 14 days after the notice is given) and place as are specified in the notice to answer questions.

(2)      Without limiting the generality of subsection (1), the Secretary may:

(a) by notice in writing given to a person who is indebted to the Commonwealth under or as a result of this Act, require the person:

(i) to provide the Department, or an officer specified in the notice, within the period specified in the notice (not being less that 14 days after the notice is given), with such information concerning the person's financial situation as is required by the notice or to produce to the Department, or to an officer so specified, within that period, such documents concerning that situation as are so specified; and

(ii) if the person's address changes, to notify the Department or an officer so specified, within 14 days of the change, of the new address; or

(b)  by notice in writing given to a person who the Secretary believes may have information concerning the whereabouts of a person who is indebted to the Commonwealth under or as a result of this Act or the financial situation of such a person, require the person to provide the Department, or an officer specified in the notice, within the period specified in the notice (not being less than 14 days after the notice is given), with such information concerning those matters as is required by the notice or to produce to the Department, or to an officer so specified, within that period, such documents concerning those matters as are specified in the notice.

(2A)   The Secretary may require the information or answers to questions under this section to be verified or given, as the case may be, on oath or affirmation, and either orally or in writing, and for that purpose the Secretary or an officer to whom information or answers are verified or given may administer an oath or affirmation.

(3)     The oath or affirmation to be taken by a person for the purposes of this section is an oath or affirmation that the evidence the person will give will be true.

(4)     A person must not fail to comply with a notice under subsection (1).

Penalty: $1,000 or imprisonment for 6 months, or both.

(4A) An offence under subsection (4) is an offence of strict liability.

        Note: For strict liability, see section 6.1 of the Criminal Code.

(4B)   Subsection (4) does not apply to the extent that the person is not capable of complying with the notice.

Note: The defendant bears an evidential burden in relation to the matter in subsection (4B). See subsection 13.3(3) of the Criminal Code.

(5)     A person shall not, in purported compliance with a notice under subsection (1), intentionally furnish information or give evidence that is false or misleading in a material particular.

Penalty: $2,000 or imprisonment for 12 months, or both.

  1. This section binds the Crown in right of the Commonwealth, of each of the States, of the Australian Capital Territory, of the Northern Territory and of Norfolk Island.
  2. This section does not require a person to furnish information, produce a document or give evidence to the extent that, in doing so, the person would contravene a law of the Commonwealth (not being a law of a Territory).


Attachment B

Section 205AB of the Veterans' Entitlements Act 1986:

(1)If:

(a)a payment or payments of a pension, benefit or other pecuniary amount are made to a financial institution for the credit of an account kept with the institution; and

(b)the Commission is satisfied that the payment or payments were intended to be made for the benefit of someone who was not the person or one of the persons in whose name or names the account was kept;

the Commission may give a written notice to the institution setting out the matters mentioned in paragraphs (a) and (b) and requiring the institution to pay to the Commonwealth, within a period (being a reasonable period) stated in the notice, the lesser of the following amounts:

(c) an amount specified in the notice, being the amount, or the sum of the amounts, of the payment or payments;

(d) the amount standing to the credit of the account when the notice is given to the institution.

  1. If:
  1. a payment or payments of a pension, benefit or other pecuniary amount that are intended for the benefit of a person are made to a financial institution for the credit of an account that was kept with the institution by the person or by the person and one or more other persons; and
  2. the person died before the payment or payments were made;

the Commission may give written notice to the institution setting out the matters mentioned in paragraphs (a) and (b) and requiring the institution to pay the Commonwealth, within a period (being a reasonable period) stated in the notice, the lesser of the following amounts:

  1. an amount specified in the notice, being the amount, or the sum of the amounts, of the payment or payments;
  2. the amount standing to the credit of the account when the notice is received by the institution.

  1. A financial institution must comply with a notice given to it under sub-section (1) or (2).

Penalty: 300 penalty units

It is a defence to a prosecution of a financial institution to comply with a notice given to it under subsection (1) (payment made to wrong account) or under subsection (2) (death of a person whose name the account was kept) in respect of a payment or payments of a pension, benefit or other pecuniary amount, any amount recovered by the Commonwealth from the institution in respect of the debt reduces any debt owed to the Commonwealth by any other person in respect of the payment or payments.


Attachment B – Copy of Standard Letter “Refund of $ Fin Ins – advice to estate”

1234567

NATIONAL OFFICE

Dear

Estate of the late

I regret the need to write to you at this time about the Veterans' Entitlements payments previously paid to the above named.

This Department pays pensions, benefits and allowances by means of an automated process whereby money is transferred directly to a pensioner's nominated account.  To avoid any delays, payment details are given to the financial institution at least 5 days before the actual payment date.  Because of this it is sometimes difficult to prevent Veterans' Entitlements payments being paid after the pensioner's death.

It was not possible to prevent the instalments for payday(s)       from being credited to      ' account number       at the      .  Therefore an overpayment of $       has occurred.

As this is an overpayment of public money, I am authorised under section 205AB of the Veterans' Entitlements Act 1986 to recover the above amount from the financial institution.  I have written to the financial institution requesting repayment of the overpaid amount.

If you have any questions about this matter please contact me on      .  You will need to quote this Reference Number       when you call.  If you are calling from outside the metropolitan area, please dial our FREECALL number shown at the bottom of this letter.

Yours sincerely

Delegate of the Repatriation Commission

      <e>>