EXPLANATORY STATEMENT
Social Security (Waiver of Debts) Specification 2007
made under section 1237AB of the Social Security Act 1991
Background
Section 47 of the Social Security Act 1991 (the Act) precludes the dual payment of age pension and certain entitlements under the Veterans’ Entitlement Act 1986 (the VEA Act) to the same person. Similarly, section 103 of the Act precludes the dual payment of disability support pension and certain entitlements under the VEA Act, and section 202 of the Act precludes the dual payment of carer payment and certain entitlements under the VEA Act. Disability pension under the VEA Act reduces the rate of age pension, disability support pension or carer payment payable under the Act. The rate of a person’s payment under the Act can also be affected if their partner receives an entitlement under the VEA Act.
Some customers misunderstand their entitlements and incorrectly claim and receive payments from both Centrelink and Department of Veterans’ Affairs (DVA).
The objective of the 2005-06 budget measure Age Pension and Service Pension Registers – Improved Integrity was to address the incorrect dual payment of entitlements to people receiving payments from both Centrelink and DVA. This measure involved a comparison of the relevant records of Centrelink and DVA customers, which identified a number of cases of dual payment. The comparison of records was followed by a daily exchange of new claim data between both agencies in order to prevent ongoing cases of dual payments.
The amounts overpaid as a result of the dual payments from Centrelink and DVA are debts owing to the Commonwealth, in accordance with section 1223(1) of the Act.
Section 1237AB provides that the Secretary may decide to waive the Commonwealth’s right to recover debts arising under the Act that are included as a class of debts specified by the Minister.
The purpose of this instrument is to specify classes of debts which may be waived. This would enable the Secretary to waive the Commonwealth’s right to recover debts from customers and their partners that have been identified during the initial comparison of Centrelink and DVA customers, except for where the dual payments were caused by fraud. As these debts were incurred by older Australians, veterans, war widows and their partners, who are likely to have held a genuine belief that they were entitled to both payments, recovery of the debts is undesirable.
The inclusion of debts arising from the dual payment of Disability Support Pension and Veterans’ Affairs entitlements in this instrument has been authorised by the Minister for Employment and Workplace Relations.
Explanation of the instrument
Section 1 sets out the name of the instrument, being the Social Security (Waiver of Debts) Specification 2007.
Section 2 provides that the instrument commences on the day after the end of the period for disallowing it, in accordance with the section 42 of the Legislative Instruments Act 2003. Paragraph 1237AB(3)(b) of the Act provides that an instrument made under that section is of no effect until the time allowed for its disallowance has passed. Accordingly, the instrument will commence immediately following that time.
Subsection 3(1) contains definitions of certain terms in this instrument. This section does not define the terms service pension and income support supplement as these terms are defined in the Act and would have the same meaning as the Act, in accordance with section 13 of the Legislative Instruments Act 2003. Subsection 3(2) clarifies that a reference to the terms age pension, carer pension or disability support pension (which are not defined under the Act) is a reference to the social security payment within the meaning of the Act that is known by that name.
Section 4 provides that the classes of debts that are specified for the purposes of section 1237AB, are those set out in Schedule 1, being debts about which the Secretary became aware following the comparison made during the period from 1 December 2005 to 28 February 2006 of the records of:
- persons receiving age pension, carer pension or disability support pension from Centrelink; and
- persons receiving a service pension, disability pension or an income support supplement from DVA.
Section 5 provides an exemption to the classes of debts specified in section 4, being debts arising because the person knowingly made a false or misleading statement, or knowingly gave false information, to the Commonwealth.
Schedule 1 specifies four classes of debts. In short, these classes are:
- Debts arising from payment of age pension which was not payable because the person also received either a service pension or an income support supplement.
- Debts arising from payment of carer payment which was not payable because the person also received either a service pension or an income support supplement.
- Debts arising from payment of age pension or carer payment which was not payable, or was payable at a lower rate, because the person also received a disability pension.
- Debts arising from payment of age pension, disability support pension or carer payment debts which was not payable, or was payable at a lower rate, because the person’s partner was receiving a disability pension, service pension or income support supplement.
Consultation
This instrument is beneficial to customers and, accordingly, public consultation was seen as unnecessary. Consultation was undertaken with the Department of Employment and Workplace Relations in relation to this instrument.
Regulatory Impact Assessment
A Regulatory Impact Statement and a Business Costs Calculator are not required as the waiver of the Commonwealth’s right to recover social security debts will have no regulatory or competition impacts, and will not impose compliance costs on businesses.