Write off

When an overpayment is written off, collecting of the debt is delayed. The debt still exists legally and can be collected later.

Claimants can request to have their overpayment written off using form D2708 Statement of Financial Circumstances.  

The authority to approve a write-off depends on the debt amount and the relevant legislative Act. Check the current  Instruments of Delegation  for details.

Complete the Overpayment write off submission template and send it to the staff member with the with the level of delegation to determine whether to approve the waiver.  

Notifying the client of the decision

The decision must be communicated with the client by phone before sending the appropriate letter available on the Compensation Claims Support Site: 

• L-99 Overpayment write-off waiver approved
• L-100 Overpayment write-off waiver declined.

The date of effect of write off may be specified in the decision letter. Otherwise, it is taken to be the date of the decision letter.

Delegates should discuss recovery options with the client if the write off is declined.

The write off determination letter should be emailed to the Debt Management Unit for their records and ongoing monitoring of any necessary recovery action, with a cc to ISH.RNC.BAU@dva.gov.au where for incapacity payments debts:

• For MRCA and DRCA debts email: rcg.debt.management@dva.gov.au
• For VEA debts email: debt.management@dva.gov.au

Tax implications and payment summary adjustments

Where a debt is written off, the amount of the overpayment is still considered to be assessable income for tax purposes.

As the client is no longer required to repay that overpaid amount, the incapacity payment summary total show the original amount received.

If the overpayment is repaid later, it can become non-taxable. In that case, the repaid amount reduces the taxable income for the year it was assessed, not the year it was repaid.

Incapacity delegates must advise both the Debt Management Unit and Veterans’ Systems Assurance and Support (VSAS) via email of the overpayment write off decision. The email should also include any overpayment write off recovery that takes place during the same financial years that the overpayment occurred. 

VSAS will amend the total income on the payment summary to the original amount the client received. 

When preparing the email to the Debt Management Unit and VSAS the delegate should raise a mySupport ticket for the payment summary adjustment, selecting Customer and Corporate Systems – DVA Core Business Applications faults and issues.

Email template E-22 Notification of overpayment write off/waiver/write off recovery available on the Compensation Claims Support Site should be used for this purpose.

Tax amendment letters are not sent to the client until recovery of the overpayment has commenced.

For more information, refer to:

• Instruments of Delegation and Authorisation – available on the DVA Intranet site
• CLIK – Military Compensation MRCA Manuals and Resources Library – Policy Manual – 11.3.3 – Write off 
• CLIK – Compensation and Support Policy Library –  12.6 Overpayments – 12.6.3 Write off
• CLIK – Compensation Claims Procedures – Communication procedures – Contacting clients regarding negative decisions
• CLIK – Compensation Claims Procedures – Incapacity Procedures – Payment Summaries
• Businessline - Implementation of new overpayment policy resources – 22 February 2023 – (CM9# 23182373E)
• Compensation Claims Support Site – Debt Management and Overpayments page.
• Debt Management page Sharepoint page.