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3.11.1.20 Debts Arising before 01/07/2001 under the SSAct & the Social Security Act 1947

Summary

SSAct section 1223 involves a number of complex issues of interpretation and application that are discussed below.

 

General provision

SSAct section 1223 describes some categories of debts recoverable under the SSAct and the Social Security Act 1947.

 

Act reference: SSAct section 1223 Debts arising from lack of qualification, overpayment etc.

 

Retrospective effect of the SSAct

The current version of SSAct section 1223 does not apply where the recipient has an 'accrued right' to have the substantive issues of the matter decided under the provisions of the Social Security Act 1947 or under earlier provisions of the SSAct. An accrued right may arise where a case was already under review at the time of the legislative change.

 

Recipient not qualified or not payable

SSAct section 1223(1) requires that it must be the 'recipient' who is not qualified for the social security payment or to whom the payment is not payable.

 

The definition of recipient in SSAct section 10A means the person to whom the benfit is provided. The definition of 'receiving' throughout the SSAct suggests a connection with payability. In everyday usage, a recipient is simply defined as 'someone who receives'.

 

Therefore, the word recipient in the SSAct means 'the person in relation to whom the payment was made'. In some cases, this will be the person who is the subject of the payment. In other cases, it will be the actual claimant.

 

This interpretation leads to difficulties in determining how a debt arises in relation to some nominee payments and some payments made in error to the wrong person. Cases involving such circumstances should be referred to the relevant helpdesk for specific advice on whether a recoverable debt exists.

 

Continuing effect of determination that social security payment is payable

Under SSAct section 1223(1) a debt arises where the recipient is not qualified for the payment OR where the payment is not payable to the recipient.

 

Section 1223(1) reflects the division of the concept of entitlement into the related notions of qualification and payability.

 

By virtue of the continuing effect of a determination that a social security payment is payable, the mere loss of qualification for a payment does not automatically result in the payment becoming NOT payable. There must be a subsequent determination that the payment is not payable before it ceases to be payable.

 

Act reference: SSAct section 1223(1) Subject to this section, if...

 

Amount paid to a person

SSAct section 1223(1) requires that the social security payment must have been paid to 'a person'.

 

Where payment has continued in error following the death of the recipient, arguably payment has not been made to a person. In addition, it is unclear at what point payment in respect of a deceased recipient becomes not payable.

 

Despite this, payments made to a deceased recipient are recoverable under SSAct section 1223(1) on the basis that the recipient has ceased to be qualified for the payment. However, under no circumstances should a garnishee notice be issued against the estate of a deceased recipient.

 

Act reference: SSAct section 1223(1) Subject to this section, if...

 

Debts & third parties

In most circumstances, the debt will be due by the person to whom the payment was made.

 

However, in some circumstances, it may be more appropriate to recover the payment from a third party.

 

At present, SSAct section 1223(1) does not explicitly provide for recovery from a third party.

 

The AAT has held that debts must be repaid, even where the amount was wrongly appropriated by a third party.

 

Act reference: SSAct section 1223(1) Subject to this section, if...

Policy reference: SS Guide 6.7.2.50 Debt Recovery by Garnishee Notice

 

Table of date of effect of determination provisions:

Determinations

SS(Admin)Act reference

Determination relating to claims

section 107

Determinations under section 78 or 81A, 85 or 85A

section 108 to 114

Determinations under section 89

section 115 and 116

Date of effect of adverse determinations relating to social security payments

section 117 to 120

Date of effect of adverse determinations relating to concession cards

section 121 and 122

Continuing effect of determinations

section 123

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Last reviewed: 11 November 2013


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Last Edited: 23/10/2013 3:25:19 PM


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