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7.9.1 Overview

7.9.1.1If the debtor is in receipt of continuing payments from DVA, and is unable to repay the debt in a lump sum, instalments may be made in the form of limitations from his/her pension.

7.9.1.2Paragraph 205(2) (c) VEA authorises the recovery of an overpayment from any pension, allowance or pecuniary benefit payable to the debtor under the VEA.

7.9.1.3All overpayments of disability pension and allowances paid under Part II or Part VI VEA may be recovered from a pensioner's ongoing income support payment or from disability pension payments under paragraph 205(2). Paragraph 205(7) (a) provides for recovery of overpayments resulting from compensation offsetting. Under this provision the overpayment may be recovered from either disability pension or income support payments, but not partly from both.

7.9.1.4An overpayment paid under the Military Compensation and Rehabilitation Scheme (MCRS) may not legally be recovered from any VEA payment. However, while this type of debt may not be legally recoverable, it may be recovered from a person's VEA payment with the debtor's written consent. DVA manages the MCRS on behalf of Defence. It is the responsibility of the Department of Defence to set policy for debt management and recovery of overpayments that arise under the MCRS. MCRS overpayment recovery policy is contained within the Military Compensation and Rehabilitation Instruction (MICRI) Number 11. This instruction can be found at this manual's Chapter 12 MCRS Overpayments.

7.9.1.5It is possible to recover health-related overpayments in respect of travel expenses and treatment cost via limitation from a DVA income support payment. However, overpayments of the latter would be uncommon, as in most cases treatment costs are usually paid directly to a health care provider. In a small number of cases, payments are made to veterans in relation to Medical Expenses Privately Incurred (MEPI). Should a health-related overpayment arise where there is no option available but to recover from an income support payment, the case should be referred to the Analysis and Review Section within the Health Services Branch, National Office before undertaking limitations from the income support payment.

7.9.1.6There is no authority under the VEA to recover from another DVA payment, defaulted loan repayments made under the Defence Re-establishment Loans Scheme. For procedures on defaults, refer to CEI No. 10.5 – Re-establishment Loans.

7.9.1.7Where a client is willing to have a limitation imposed to recover a third party's debt, and consent is given in writing, deductions can be made from the client's pension under paragraph 205(2) (e) VEA. For example, a wife may approach the Department with an offer to repay her husband's overpayment. Before the Department can accept such an offer, the wife must be advised that she is under no legal obligation to repay her husband's overpayment, and that she can withdraw her consent at any time. This advice must be in writing.

7.9.1.8If consent is withdrawn, limitations must cease immediately. The debtor must then be contacted and negotiations commenced for the recovery of the balance outstanding.

Note:For information regarding the reciprocal recovery of DVA/Centrelink debts, refer to this manual's Chapter 8 Centrelink/DVA Recovery.