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B31/1993 RECOVERY OF OVERPAYMENTS RESULTING FROMAPPEAL DECISIONS

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DATE OF ISSUE: 9 June 1993

RECOVERY OF OVERPAYMENTS RESULTING FROMAPPEAL DECISIONS

INTRODUCTION

1.The purpose of this Instruction is to describe the procedures used to recover overpayments that arise when the Commission successfully appeals against a decision to grant, continue payment or increase payment of a pension or allowance.

SOURCE AND FORM OF OVERPAYMENT

2.An overpayment of this type can arise from:

.a successful appeal by the Commission against a VRB decision concerning a compensation pension; or

.a successful appeal by the Commission against an AAT or Court decision concerning either a compensation pension or a service pension.

3.Such overpayments consist of two components:

.Arrears that were paid as a result of the VRB, AAT or Court decision; and

.Ongoing payments to date resulting from that decision.

4.Where a decision is overturned on appeal, all amounts paid become unauthorised payments and are recoverable.

USE OF STAY ORDERS TO LIMIT SIZE OF POTENTIAL OVERPAYMENT

5.Where a pensioner successfully appeals against a decision of the Department, the Commission may decide to appeal against that outcome at a higher level.

6.If the Commission does appeal, an application for a stay order to withhold both ongoing payments and arrears is lodged by the Commission.

7.A stay order is issued by a higher authority, namely the AAT or the Federal Court, at a preliminary hearing.  It is not necessarily granted.  When deciding whether or not to grant a stay and, if so, the form of the stay, the court or tribunal considers the following:

.The financial position of the person affected,

.The probability of the Commission's review case succeeding,

.The risk of any money overpaid being dissipated,

.Whether a stay is required to preserve the subject matter of the dispute.

8.After considering these factors, the court or tribunal makes a determination, pending a final decision, as to whether the original decision should be implemented or in some way stayed.

9.A stay order is generally granted for arrears but seldom for ongoing payments.  However, a stay on both components is usually applied for as this facilitates overpayment recovery if the original decision of the Department is re-instated.

LEGISLATIVE BACKGROUND

10.Prior to 1988, the Veterans' Entitlement Act (VEA) and Seaman's War Pensions & Allowances (SWPA) Act did not provide that payments of the type described above were debts due to the Commonwealth.  Consequently no such money was recovered.

11.In 1988 the Veterans' Entitlement Act (VEA) and the Seaman's War Pensions & Allowances (SWPA) Act were amended to classify these payments as 'unauthorised payments' and provide for their recovery.  The amendments were made to section 205 of the VEA and section 55A of the SWPA Act.

12.Paragraph 205(1)(d) of the VEA states that an overpayment shall be recovered where:

"an amount has been paid ... and the payment of that amount has since

become an unauthorised payment ..."


13.Subsection 205(7) defines "unauthorised payment" as an amount paid by way of pension, allowance or other pecuniary benefit where:

"a)the decision pursuant to which the payment was made is:

(i)set aside; or

(ii)varied so that a lesser amount, or no amount is payable by way of pension, allowance or other pecuniary benefit;

by any person, body, tribunal or court; and

b)the setting aside or variation has effect from the date, or from a date earlier

than the date, of the payment."

POLICY CHANGES

14.Prior to the legislative amendments, a person who successfully appealed against a decision of the Department was sent a letter advising them of the Commission's right to appeal against that outcome.  This letter stated "that regardless of the outcome of any appeal, the Commission would not seek to recover any pension payments already made or the cost of treatment already provided".

15.Since the legislative amendments, this statement has been removed from the letter.  Due to the time spans involved in these matters however, overpayments are still being waived on the grounds that the person had received such a letter advising that the Commission would not take recovery action.

16.The Commission has now approved changes to the letter that is sent out so that the appropriate paragraph now reads:

"If the Commission does appeal, and is successful in the outcome, any back-payments and/or pension payments made to you become unauthorised payments at law and may be recovered from you."

A copy of this letter is to be found at Attachment A.

17.The Commission has also approved that the following procedure be used to recover unauthorised payments:

Where a payment becomes an unauthorised payment (overpayment):

i)Revoke the payment authority that gave rise to the arrears being withheld as a result of a stay order.

ii)In all cases, raise an overpayment for the full amount of the "unauthorised payment" which has been paid to the pensioner (this is a statutory requirement).

iii)Recover this overpayment through the normal recovery process, except where:

a)the payment of pension by DVA prevented or reduced the payment of a pension or benefit by DSS; or,

b)the Commission's general policy on waiver, write-off or deferral applies.

Where payment by DVA has prevented or reduced payment by DSS, DVA will recover the amount in excess of the maximum rate of DSS pension or benefit that could have been paid (ie. without taking the client's income and assets into account) and waive the balance of the overpayment.

CONTACT OFFICER

19.The contact officer regarding this policy change is Laurie Howell (Policy Administration & Advice), Central Office.  Tel (06) 289 6439.

PETER HAWKER

NATIONAL PROGRAM DIRECTOR

BENEFITS

THIS ATTACHMENT HAS BEEN RE-KEYED TO ENABLE IT TO BE LOADED ONTO THE GENERAL

ATTACHMENT A

PROPOSED LETTER TO WAR WIDOWS AND DP CASES

Dear                     ,

I am writing about the recent decision of the Veterans' Review Board (VRB) granting you a                     /increasing your pension from                  to                     .

As the VRB mentioned in its letter to you, the Repatriation Commission may appeal to the Administrative Appeals Tribunal (AAT) if it is dissatisfied with the decision made by the Board.

The purpose of this letter is to let you know that the Commission is considering whether or not it will appeal to the AAT in this case. The Commission has until         to decide whether to lodge an appeal. You will be advised in writing when the decision is made.

As a result of the VRB decision, you will receive regular pension payments and any medical treatment to which you are entitled, however, you will not receive any back-payments of the pension until the case is finalised.

If the Commission decides not to appeal, you will receive any pension back-payments due to you, as soon as possible.

If the Commission does appeal, and is successful in the outcome. any back-payments and/or pension payments made to you become unauthorised payments at law and may be recovered from you. The authority to recover any such amounts is contained in subsection 205(7) of the Veterans' Entitlements Act 1986.

If you have any questions on this matter, please telephone me, toll free, on (008) 026185.

Yours sincerely

                            .

Compensation and Review Branch