12.6.4.1 Special Income Support Debt Waiver Policy

Special Income Support Debt Waiver Policy 

Background

The Robodebt Royal Commission was established on 18 August 2022 to enquire into the establishment, design and implementation of the Robodebt scheme; the use of third-party debt collectors under the Robodebt scheme; concerns raised following the implementation of the Robodebt scheme; and the intended or actual outcomes of the Robodebt scheme. The Commission’s report was delivered on 7 July 2023.

In response to the recommendations of the Commission report, the Government introduced the Social Security and Other Legislation Amendment (Technical Changes No. 2) Bill in 2025. The Bill passed and the resulting Act received Royal Assent on 4 December 2025. The Act addresses long-standing technical issues in income assessment and debt recovery as part of the Government response to the Royal Commission into the Robodebt Scheme. It introduces several amendments to improve the administration of social security and related legislation in Australia, including the following debt waiver policies:

• income support small debt waiver; and
• income support justified in the circumstances debt waiver.

No amendment of the VEA was required for these waiver policies, as the VEA already provides wide authority for the Repatriation Commission to waive a debt under subparagraph 206(1)(b)(i).

It is important to understand the policy outlined in this section is for income support payment debt under the VEA only and does not apply to debt generated through compensation overpayments under the VEA, MRCA or DRCA.

Policy for Age Pension under the Social Security Act 1991 (SSA)

For guidance on equivalent policies for Age Pension under the SSA see the; 6.7.3.40 Waiver of debt on the basis of special circumstances | Social Security Guide and; 6.7.3.60 Waiver of a small debt | Social Security Guide.

Policy for Income Support Payments under the VEA

The Commission has authorised under 206(1)(b)(i) of the VEA, the following two categories of debt waiver.

Income support small debt waiver category

Income support debts less than, or likely to be less than, the small debt waiver threshold amount must be waived. The small debt waiver threshold amount is indexed on 1 July each year by an indexation factor calculated in line with CPI increases. The current threshold can be found here.

Debts which are only under the small debt waiver threshold due to payments made towards that debt are not eligible for the small debt waiver.

Note that the Income Support Small Debt Waiver policy applies to both manually generated and systems generated overpayments. In the event that the system generates in a given payment period an overpayment less than the threshold, that overpayment is to be waived for that payment period.

Income support Justified under the Circumstances (JuC)

Background

This category of debt waiver is to be understood as a caveat on the waiver policy contained in chapter 12.6.4 Waiver. The JuC category allows a delegate to waive an income support debt where that waiver would have been authorised but for the fact the person provided false or misleading information. Such a waiver can be authorised if the person was justified in the circumstances in providing the false or misleading information.

There are four conditions that must be met in order to apply a waiver under this category:

1. The debt must have been generated by an income support overpayment under the VEA.
2. The person would otherwise have met one of the waiver categories in 12.6.4, except that they provided false or misleading information.
3. The person provided false or misleading information that resulted in all or part of the debt.
4. The person was justified in the circumstances in providing that false or misleading information.

Each of these is outlined in more detail below.

1. The debt is generated by an income support overpayment under the VEA

The first condition that must be met in order for a waiver to be authorised under this category is that the overpayment be generated by an income support payment(s) under the VEA. For example, it is authorised for Service Pension, Veteran Payment, Income Support Supplement and other income support payment and allowances overpayments. It is not authorised for VEA compensation overpayments (such as Disability Compensation Payments or War Widow(er)s Pension) or compensation payments under the MRCA or DRCA.

2. The ‘except for’ satisfaction of a waiver category

The second condition that must be met is that the debt qualifies for a waiver under one of the following categories, except for the fact that the person supplied false or misleading information. The categories include (see 12.6.4):

• Extreme or unusual circumstances;
• The 'other reasons' category;
• Administrative error;
• Administrative delay; or
• Special circumstances.

The idea here is that the person would have qualified for a waiver under one of these categories had they provided accurate and truthful information about their income support claim. Other than under an income support JuC category, a waiver cannot be authorised “… where the overpayment arose because of fraud; false or misleading statements or representations; … or the payment was not received in good faith.”

3. False or misleading information provided

The phrase “provided false or misleading information” is to be understood in a wide sense to include both an act, failure or omission by the debtor that led to the debt; or an act, failure of omission by another person which led to the debt regardless of whether the debtor had knowledge of this.

In addition, the false or misleading information that was provided need not be the source of all the debt. Provided at least part of the debt was caused by the provision of false or misleading information, that is sufficient.

4. Justified under the Circumstances 

This criterion recognises that a person can be justified in engaging in misleading and false representations in extreme circumstances.

Justified under the circumstances can be interpreted as having an acceptable, good cause or reason to knowingly make false representations in connection with the debt. That is, a delegate must be satisfied that a person’s circumstances provide acceptable reason for warranting their actions. This is often subjective and based upon the circumstances of a particular case and should also include considering the personal perspective of the debtor and their decision-making capacity. It should be noted; the debtor is not required to 'justify' how the circumstances impacted their decision-making or conduct. There is no burden on the debtor to justify their state of mind.

The following is an inexhaustive list of examples of being justified in the circumstances:

• A person makes false representations to DVA because of coercion or fear of violence from a partner/family member if they did not do so.
• A person was suffering from a mental health issue which impaired their capacity to properly consider their situation and meet their obligations.
• A person with non-mental health related cognitive impairment impacting their decision-making capacity at the time the false or misleading information was provided.
• A person was experiencing homelessness at the time the false or misleading information was provided.

In assessing whether a person’s misrepresentations were justified in the circumstances, the delegate must use their discretion, show sensitivity and judge on the specific circumstances of the case. The very nature of the category renders clear guidance that covers all cases intractable.