Introduction

This document outlines the policy for handling overpayments made under the Veterans’ Entitlements Act 1986 (VEA). The intended audience of the document are delegates, and those who manage overpayments made to veterans and their dependants.

Once it has been established that an overpayment has taken place, and the amount of that overpayment has been calculated, the overpayment must either be:

• recovered;
• deferred;
• written off; or
• waived.

This document outlines the Repatriation Commission’s (the Commission) policy on when each of these options should be pursued. The policy is high level and strategic in nature. It is designed to provide guidance to allow maximum flexibility for business areas to manage overpayments where supported by the provisions in the VEA and the Public Governance, Performance and Accountability Act 2013 (PGPA Act). The policy takes into account the Commission’s obligation to pursue the recovery of public money owed to the Commonwealth and sets out circumstances in which it may be appropriate to defer, write-off or waive a debt to the Commonwealth.

This document does not provide guidance on the following:          

• establishing that an overpayment has taken place;
• procedures for the calculation of an overpayment;
• procedures for calculating the correct payment of a client; or
• procedures for the recovery, deferral, write-off and waiver of overpayments.

For information on these, consult the relevant procedural documents managed by the Client Benefits Division.

What is an overpayment?

Generally speaking, an overpayment will occur when a client is paid more than they are legally entitled. Such an overpayment creates a debt for that person, which is owed to the Commonwealth.

Section 205(1) of the VEA provides an exhaustive list of the types of overpayments and debts that can be dealt with under the VEA. In accordance with s 205(1), this document deals with overpayments and debts that arise where:

(a) in consequence of a false statement or representation, or of a failure or omission to comply with the VEA, an amount has been paid by way of pension, allowance or other pecuniary benefit under the VEA that would not have been paid but for the false statement or representation or but for the failure or omission; or

(b) an amount has been paid to a person under a prescribed educational scheme that was not lawfully so payable; or

(c) an amount has purported to have been paid by way of pension, allowance or other pecuniary benefit under the VEA, the Social Security Act 1991, the Social Security Act 1947 or the Seamen’s War Pensions and Allowances Act 1940 that was not lawfully so payable; or

(ca) an amount has been paid by way of family assistance under the family assistance law that was not lawfully so payable; or

(cb) an amount has purported to have been paid by way of parental leave pay that was not lawfully so payable; or

(cc) an amount has purported to have been paid by way of dad and partner pay that was not lawfully so payable; or

(cd) an amount of compensation (within the meaning of the Military Rehabilitation and Compensation Act 2004 (MRCA)) has been paid under the MRCA that should not have been paid; or

(d) an amount has been paid, whether before or after the commencement of section 32 of the Veterans’ Affairs Legislation Amendment Act 1988, by way of pension, allowance or other pecuniary benefit under this Act, the Social Security Act, the Social Security Act 1947 or the Seamen’s War Pensions and Allowances Act 1940, and the payment of that amount has since become an unauthorised payment; or

(e) a person has incurred a debt under another Act (whether before or after the commencement of this paragraph) for failing to repay part or all of an amount that has been paid as described in paragraph (b); or

(f) a person has incurred a debt under the Social Security Act 1991 (whether before or after the commencement of this paragraph) for failing to repay part or all of an amount that has been paid as described in paragraph (c) or (d); or 

(fa) a person has incurred a debt under subsection 204(2) of the VEA; or

(g) a person has received an advance payment of pension under Part II, III or IV of the VEA or of income support supplement.

(1AB)  If:

(a) a person has received an advance payment of a pension under Part II, III or IV of the VEA, or of an income support supplement; and

(b) the pension or income support supplement ceases to be payable to the person; and

(c) at the time when the pension or income support supplement ceases to be payable the person has not repaid the whole of the advance payment;

the amount that has not been repaid is a debt due to the Commonwealth.

Recovery, write-off, deferral and waiver

A debt must be raised and then either recovered, written off, deferred, or waived. It must not be ignored. As discussed below, DVA has a legal obligation to pursue the recovery of a debt under the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) unless a specified exception applies.

Recovery of overpayments is important to ensure that clients receive the correct rate of payment and that inappropriately, incorrectly or unlawfully paid Commonwealth money is recovered by the Commonwealth. This allows DVA to make sure its clients receive all the lawful financial entitlements that are justifiable and consistent with the relevant statutory requirements.

Write off or deferral stops recovery action for an undefined period. At any time, the write off or deferral can be reversed and recovery proceedings can begin where the client’s financial circumstances change and recovery may be possible. Unlike a waiver, write off does not extinguish the debt.

Waiver amounts to a permanent bar to the future recovery of the debt. Once the debt has been waived, recovery of the debt cannot be pursued at a later date.

If a debt is written off or waived under the VEA the PGPA Rule requirement to recover the monies owed to the Commonwealth will not apply.

Does the Commission have a preference for dealing with an overpayment?

The policy of the Commission is that delegates should first consider recovery then, if appropriate, deferral, then write-off, then waiver.

Unless there are sufficiently good reasons, an overpayment must be recovered. If there are such reasons, a write off or deferral may be considered in the first instance. Only if there is sufficiently good reason why a write-off or deferral is not appropriate should a delegate consider full or partial-waiver of the debt.

This document outlines the circumstances for when a write off can be undertaken rather than recovery, and the circumstances for when a waiver is to be preferred over write-off.

A debt can be deferred or waived in part or in whole. The part of the debt that is neither deferred nor waived must be recovered.

The PGPA Act 

The Public Governance, Performance and Accountability Act 2013 (PGPA Act) imposes obligations on the accountable authority of a non-corporate entity. In relation to DVA, this is the Secretary of the Department. The Repatriation Commission (Commission) is a body corporate that is taken to be a part of the Department for the purposes of the PGPA Act (section 179A of the VEA). Officers of the Commission are officials of DVA for the purposes of the PGPA Act and are subject to the PGPA requirements to deal with Commonwealth monies and resources ethically and responsibly.

While the PGPA Act provides a backdrop to the management of Commonwealth monies, officers recovering overpayments, or writing off, deferring or waving debts under the VEA are exercising powers under those Acts not the PGPA Act.  They will be delegates of the Commission under the VEA.

Section 11 of the PGPA Rule provides:

The accountable authority of a non-corporate Commonwealth entity must pursue recovery of each debt for which the accountable authority is responsible unless:

(a) the accountable authority considers that it is not economical to pursue recovery of the debt; or

(b) the accountable authority is satisfied that the debt is not legally recoverable; or

(c) the debt has been written off as authorised by an Act.

The write off and deferral provisions in the VEA are authorisations contemplated in paragraph (c).  This means that where a debt has been written off or deferred under the VEA, the Secretary is not required to pursue the recovery of the debt under s 11 of the PGPA Rule, while the debt remains written-off or deferred.

Section 11 does not mention waiver, as when a debt has been waived the debt no longer exists and section 11 will not apply.

Section 63 of the PGPA Act provides the authority for the Finance Minister to waive the right of the Commonwealth to recover amounts that are due and owing to it.  This waiver power operates separately to the waiver power in the VEA.  If the Finance Minister waives a debt under the PGPA Act, the debt is taken to no longer exist and there is no longer a debt to be pursued under the PGPA Rule or the VEA.