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7.1.2 Principles of recovery

7.1.2.1The principles of recovery are:

  • Cost effectiveness
    Recovery action should be cost effective. This may include recovering a large part of the debt quickly. It may also include discontinuing recovery action if it is too costly, compared to the size of the debt.
  • Capacity to repay
    Accurately consider the debtor's capacity to repay. The level of repayment must be within their means and open to negotiation. (Recovery action which creates further need for income support, is not in the best interest of the Commonwealth or the debtor.)
  • Negotiation
    Negotiation with the debtor is the Department's basic recovery technique and should be used to ensure the best possible repayment arrangement for both parties.
  • Immediate follow up
    Immediate follow up is crucial.

After the 28-day notification period has elapsed; and

  • the debt has not been fully repaid; and
  • the person has not entered into an arrangement to repay the debt; or
  • the person has entered into an arrangement to repay the debt and has failed to make the repayment;

a further notice should be issued. In most cases where a person is in payment, recovery would be effected via instalments of pension or by another method as agreed with the debtor, and a further notice would not be required.

7.1.2.2The procedural guide for recording recovery and other methods of finalising debts on DMRS may be obtained from the DVA intranet.