You are here
11.6.2 Guidelines for write off
The decision to write off a debt will generally only be made after extensive consultation with the delegate, the claimant and the National Manager, Rehabilitation Compensation and Systems Support Group.
The question of a possible write-off may arise from a direct request from the person who owes the debt to the Commonwealth; or in circumstances where an overpayment is identified as having a detrimental impact on the person and where it would be inappropriate to seek recovery at that particular time.
Matters to be taken into account when assessing possible write-off action include:
- the circumstances of the overpayment;
- the amount of the overpayment (confirmed in consultation with an independent delegate);
- any history of unsuccessful attempts to recover an overpayment;
- the capacity of claimant to repay the debt now or in the future (detailed analysis of current and projected financial position required);
- the likelihood of MRCC success in recovering the overpayment through court action. (Advice should be sought from the relevant Policy Director who may seek the opinion of the Business Integrity and Legal Services Group);
- the cost effectiveness of any recovery attempts. (It is illogical to pursue legal action for a very small debt. A waiver of the debt may be more appropriate); or
- any other factors affecting the viability of pursuing recovery of the overpayment.
While the above points should be considered, the final decision lies with the delegate who must consult with their manager as to the appropriate course of action. The larger the overpayment the greater will be the need for a careful review of DVA's options regarding the debt.
For large overpayments, a 'write-off' is generally to be preferred over a 'waiver'. This is because it is virtually impossible to predict a claimant's future financial circumstances. For example, a lottery win could make a dramatic difference and recovery of an overpayment would only be possible if the debt had been written off rather than waived. If waived, the debt no longer exists at law.
Before actioning a decision to write-off a debt, the delegate should obtain a signed acknowledgement of the debt from the claimant. This acknowledgement should state the claimant is aware that:
- the write-off does not remove the debt; and
- the Commonwealth may pursue the debt some time in the future.
It may be appropriate to review each write off at periodic intervals. Those review times (preferably agreed) should be included in the acknowledgement. There should be a minimum 12 month interval between reviews into a debtor's circumstances.
In some cases, a debtor may agree to a partial repayment of an overpayment. In these circumstances, the debtor may seek a 'deed of release' to be signed by both parties. The 'deed of release would be a legally binding document that releases the debtor from all liability and prevents either party from taking further action in relation to the outstanding amount. Such an executed agreement would constitute a waiver (rather than a write-off) of the outstanding debt.
Debt Management staff are available to provide guidance when required and must promptly be provided with a copy of the claimant's acknowledgement and the delegate's written decision to write off a debt.
Delegates making a decision to write off a debt must be at the EL1 level or above.