Alternative methods of recovery
Where the preferred methods are not available a number of alternatives are permitted, including:
- garnishing of wages and investments;
- third-party payments; or
- civil recovery.
Payment notices applying to wages, investments, and so on
Payment notices constitute a simple and cost-effective way of intercepting money owed by a client, but they should be considered only when the client is not in receipt of a DVA payment or will not negotiate a reasonable settlement of the debt.
Section 205A of the VEA enables DVA to request, in writing, payment from any ‘person’:
(a) by whom any money is due or accruing or may become due to the client;
(b) who holds or may subsequently hold money for or on account of the client;
(c) who holds or may subsequently hold money on account of some other person for payment to the client; or
(d) who has authority from some other person to pay money to the client.
The request is effected by the issue of a written notice to this person, which includes, for example, an employer, a financial institution and the Australian Taxation Office. A copy of the notice must also be sent to the client.
The notice will require the person to pay the Commonwealth the amount specified in the notice (not exceeding the amount of the debt), or a specified amount out of each payment that the person becomes liable from time to time to make to the client until that debt is satisfied (section 205A(1)(e)-(f)).
The penalty interest and administrative charge should be added to the amount of the overpayment and be specified as part of the total amount in the payment notice.
The person must make the payment/s specified in the notice by the date specified in the notice, which must be at least 14 days after the notice is given (section 205A(2)).
It is a criminal offence for the person to fail to comply with the notice (section 205A(3)).
Third party payments
If 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 section 205(2)(e) of the VEA.
A spouse may offer to repay their partner’s overpayment. Before DVA can accept, however, the spouse must be advised in writing that they are under no legal obligation to repay their partner’s overpayment and that consent can be withdrawn at any time. If consent is withdrawn, the client must be contacted and negotiations begun for recovery of the amount outstanding.
Civil action
In some circumstances civil recovery can be sought through the courts, although this is a last resort. If you think legal action offers the best way of recovering debt or of potentially holding a charge over an asset in order to protect the Commonwealth’s interest, this should be discussed with DVA’s General Counsel Division.