Prior to discussing write off and waiver in more detail, it is important to understand what is meant by 'cost effective'. Cost effectiveness is applicable to both write off and waiver.
Where mentioned as part of the very specific criteria for either writing off or waiving recovery of an overpayment, it should always be remembered that cost effectiveness means balancing time, cost and outcome.
TIME
Take into account factors such as:
-issue of all standard letters (about 2 hours);
-negotiations with the debtor (up to 4 hours);
-discussions with the state manager (up to 2 hours);
-submission preparation (2 hours); and
-organising and managing diaries (half hour);
and balance these against the cost of the overpayment and the time expected for full recovery.
It should never be assumed that because the $ figure of an overpayment is small, it can more easily be written off or waived. Each case must be considered on its individual merits.
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Example 1 |
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WHERE COST/TIME MAY NOT APPLY |
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An overpayment has been raised against a service provider for $23.00. Recovery should automatically occur from the service provider's next cheque payment. |
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Example 2 |
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WHERE COST/TIME MAY APPLY |
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An employee now no longer in receipt of compensation but studying at University has incurred an overpayment of $345.00. Following negotiation, it is established that, for the next 4 years while the employee is undertaking study and receives AUSTUDY, it would be quite difficult for him to repay the $345.00. |
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There may be reasonable grounds to write this overpayment off for the 4 year period, and while periodic review should be undertakento ensure that the employee's circumstances have not altered, it is probably more cost effective to delay active pursuit of recovery. |
COST
Determine the cost for the ti — me it takes each of the following areas to complete their role in the process:
-the claims manager;
-the state manager;
-the Operations Group;
-the CEO.
and balance this against the amount of the overpayment and the time expected for full recovery.
OUTCOME
Taking into account costs incurred to investigate and pursue recovery, will the overpayment be recovered? Balancing cost effectiveness requires consideration of:
$ amount of recovery vs outcome
where “$ amount” is the potential maximum time, including its dollar cost, for Comcare to fully recovery the overpayment.