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This Chapter contains instructions for the issue, management, payment,
transfer, reporting and write-off of debts owed to the department.
The FMA Act uses the terms "debts" and "amounts owing":
An amount is a "debt" or an "amount owing" when the following criteria are
Debts owing to the Commonwealth should be pursued to the fullest extent
possible. Section 47 of the FMA Act obliges agency Chief Executives to pursue
recovery of all debts for which they are responsible in relation to the
operations of their agency unless the debt has been written-off as authorised by
an Act, or it is considered that the debt is not legally recoverable or recovery
is not economical to pursue.
If the amount in question does not meet the above criteria (eg the amount is
subject to a dispute) it could still be considered to be a receivable. FMA Act
section 44 obliges departmental officers to take reasonable action to recover
all of the agency's receivables, including items that are not technically debts
or amounts owing.
The basic principle is that, unless otherwise allowed by law (eg under
statute or contract), amounts owing to the department should be paid in full
immediately they become due.
Where it is not possible or reasonable for an amount to be paid in full
immediately and in the absence of any statutory right of the debtor to do
otherwise, consideration may be given to contracting with the debtor to allow
payment of the amount by instalments or in full at a deferred date.
The Secretary has delegated the power under FMA Act section 34(1)(c) to allow
payment by instalments of an amount owing to the department to:
The Secretary has delegated the power under FMA Act section 34(1)(d) to defer
the time for payment of an amount owing to the department to:
A debt is written-off when the Secretary (or their delegate) decides that
there is justification to not pursue recovery of a debt. When written-off a debt
becomes dormant, but it can be pursued again at a later date if circumstances
The Secretary has delegated the power to approve the write-off of an
outstanding debt under FMA Act section 47 to:
FMA Act section 34(1)(a) allows the Finance Minister (or their delegate) to
waive amounts owing to the Commonwealth in cases where there is no other viable
mechanism to extinguish the debt. A waiver usually applies to cases where
there's a moral obligation, rather than legal obligation, on the Commonwealth to
extinguish the debt.
A moral obligation may be established after consideration of whether
repayment of the debt in a person's circumstances would be inequitable, or
whether it would cause undue ongoing financial hardship.
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