What is a waiver?
A waiver is a permanent giving up of the right of recovery of a debt or part of a debt by Centrelink. As a result any debt or part of a debt that is waived ceases to exist [see Social Security Act 1991 (Cth) s 1237].
In what circumstances will a waiver be granted?
Waivers can only be granted in specified circumstances, outlined below.
Administrative Error Waiver
An administrative error waiver may be granted where the debt is attributable solely to administrative error and the money was received by the person in good faith, and the debt was not raised within six weeks after the first payment which caused the debt, or six weeks after the end of the notification period which the person complied with. In this case all or part of the debt must be waived [see Social Security Act 1991(Cth) s 1237A].
Special Circumstances Waiver
A special circumstances waiver may be granted where the debt did not arise from a person knowingly making a false statement or representation, and there are special circumstances other than financial hardship alone and it is more appropriate to waive rather than write off the debt. In this case all or part of the debt may be waived [see s 1237AAD]. Special circumstances would indicate circumstances that are unusual, uncommon, or exceptional, and could relate, for example, to circumstances regarding family violence, health issues, or other personal matters. What does or does not constitute special circumstances will be determined in each individual case as the Act does not define what is meant by special circumstances in these instances.
Waiver in other circumstances
A debt may be waived in other circumstances, such as where the debt is a very small one and the costs associated with recovery exceed the amount owed [see s 1237AAA].
Debts can also be waived in other circumstances prescribed by the Social Security Act 1991 (Cth), such as where Centrelink have agreed to settle a civil action against a debtor for recovery for less than the full amount of the debt. In this case the difference between the amount owed and the amount agreed upon for settlement must be waived [see s 1237AAB].
Waiver of debt by the Department of Finance
The Department of Finance has a discretionary power to waive debts owed to certain types of Commonwealth bodies, pursuant to section 63 of the Public Governance, Performance and Accountability Act 2013 (Cth). Services Australia (which incorporates Centrelink) is one such body to whom this section applies.
A person can request a waiver of debt where recovery of the debt would otherwise be inequitable or would cause ongoing financial hardship to the person. A waiver can only be sought in circumstances where other options in dealing with the debt (such as those options available to Centrelink and listed above) are not appropriate. Seeking a waiver of a debt from the Department of Finance is therefore an option of last resort and cannot be used where other viable options exist to deal with the debt.
Where a waiver of debt is granted, the debt is extinguished completely and no recovery proceedings can be made to recover it in the future.
An application for a waiver of a debt can be made by completing the Waiver of Debt Application Form on the Department of Finance website.
If the Department refuses to grant the waiver, an aggrieved person can lodge a complaint with the Commonwealth Ombudsman’s office or an application for review can be lodged in the Federal Circuit Court [see Administrative Decisions (Judicial Review) Act 1977 (Cth)]. Legal advice should be sought before commencing any court application.
There is no automatic right to have a waiver of debt application granted, as the decision is entirely at the discretion of the Department of Finance.