If at any stage the delegate pays funds out of the person's income management account and:
then such an action (payment) will still be valid and the amount paid out in excess of the amount in the person's income management account will be a debt owed by the person to the Commonwealth (SS(Admin)Act section 123ZJ). This debt will be raised as soon as possible after Centrelink becomes aware of the error.
Act reference: SS(Admin)Act section 123ZJ Value of action taken under Division 6 exceeds credit balance of income management account
If Centrelink makes a payment out of a person's income management account, and before recording this debit in the person's income management record, the amount in a person's account falls below this amount, then Centrelink can either:
If necessary, Centrelink will work with the customer to determine which deduction option is the most suitable for the person's circumstances.
Note: Income managed funds can be used to make lump sum repayments towards Centrelink debts. This action can only be taken with the agreement of the person, and the delegate MUST still ensure that the priority needs of the person and those of their partner and dependants are met first, before an amount is repaid to the Commonwealth (126.96.36.199).
Example 1: John has a balance of $500 in his income management account, and John buys a washing machine for $450 by arranging a direct payment from Centrelink. However, before this amount is debited from John's account further debits are made from the account; $150 for food. Centrelink will raise a debt due to the Commonwealth for $450, because they are unable to withdraw the $450 from John's account.
Example 2: Again John has a balance of $500 in his income management account, and John buys a dryer, to accompany his washing machine, for $400. Before this amount is debited from John's account $150 is debited from the account for food costs and $200 is credited to his account by way of a payment.
Because the $150 deduction reduced John's income management account to $350, which is below the purchase amount for the dryer, Centrelink has two options. It may raise a debt due to the Commonwealth for $450 (and leave the balance of the income management account unchanged) or deduct the $450 from John's account. Centrelink will contact John and discuss which payment option is the most appropriate.
Act reference: SS(Admin)Act section 123ZIA Balance of income management account falls below value of action taken under Division 6
Last reviewed: 12 November 2012