The Law Handbook 2024

338 Section 5: Managing your money • JobSeeker Payment; • Parental Leave Pay; • Parenting Payment; • Pension Supplement (basic amount); • Sickness Allowance; • Special Benefit; • YouthAllowance, if the person is over 16 years old. FTB(A), FTB(B) and Rent Assistance are generally not included in taxable income. Amounts of the Newstart Allowance, Wife Pension (where the person’s partner is of Age Pension age), Bereavement Allowance, Sickness Allowance, Widow B Pension, and Widow Allowance that were paid before the introduction of the JobSeeker Payment also form part of the recipient’s taxable income. Although some pension payments are included in taxable income, a special income tax offset for beneficiaries ensures that people whose only income comes from certain qualifying social security payments and allowances pay no income tax. A special income tax offset for seniors and pensioners reduces the chance of a person paying income tax who only receives benefits, unless they have income in addition to the benefit. More information is available from the Australian Taxation Office ( ATO ) (www.ato.gov.au) . Advice from a lawyer or accountant should be obtained on this complex area if any problems arise. Overpayments Overview Where a person is paid a pension, benefit or allowance to which they are not entitled, a debt may be owed to the Commonwealth. Overpayments are covered in Chapter 5 of the SS Act. Similar provisions relating to family assistance overpayments are in Part 4 of A New Tax System (Family Assistance) (Administration) Act 1999 (Cth). A 10 per cent penalty may be added to a debt if the person with the debt refuses or fails to provide information about their employment income, or they knowingly or recklessly provide false or misleading information without a reasonable excuse. Recovering the debt If the person with the debt is still receiving a social security payment, the debt can be recovered by withholding part of that payment. If the amount being withheld is causing the person hardship, Centrelink can reduce the withholding amount either temporarily or indefinitely. When asking Centrelink to reduce the amount being withheld, details of financial circumstances need to be provided. The Commonwealth Government can also recover an overpayment by civil court proceedings. Other means of recovery include: • a garnishee order (an order that allows money to be deducted from wages, bank accounts, tax returns and lump sum Centrelink payments); • repayment by instalments; • recovery from a third party. Where a person is receiving income other than a government benefit, Centrelink will often refer a debt to private debt collectors. Private debt collectors must comply with the Australian Securities and Investments Commission/Australian Competition and Consumer Commission debt collection guidelines. Any person who is faced with a demand for recovery of a debt should immediately seek legal advice (see Chapter 2.1: Legal representation, and Chapter 2.4: Legal services that can help) and consider whether to lodge an appeal (see ‘Social security appeals’, below). Write off or waive a debt In some circumstances, Centrelink may write-off or waive the recovery of a debt. Write off a debt The decision to write off a debt is made when it is determined that, in the circumstances, there is no point trying to recover the debt. However, unlike when a debt is waived, a write-off debt still exists and may be pursued later. Centrelink may write off a debt in limited circumstances. These include where there is no proof of the debt or if a person is not receiving a social security payment and it would be too expensive for Centrelink to recover the debt (s 1236 SS Act). Waive a debt Where a debt is waived, the power to recover the debt is permanently extinguished. Centrelink may waive the recovery of all or part of a debt in certain defined circumstances (s 1237–