VIC Centrelink Family Tax Benefit Overpayment Debt from 2001

Hi Stephen,

Generally a limitation of action applies for debts which are older than 6 years which prevents the creditor recovering them. This same limitation applies to the recovery powers of social security bodies, however it is important to understand how the 6 year limitation applies.

The start of the 6 year period is the first day an officer becomes aware of the "circumstances that gave rise to a debt", or "could reasonably have been expected to have done so".

Also the period might be extended if there has been some activity on the debt (ie. a repayment, acknowledgement of debt, legal action, filing of review relating to recovery or internal department actvity relating to action for recovery of debt) during that 6 year period. Every time something happens in relaiton to the debt such as a recovery action a new 6 year period begins. Therefore, it is possible for the 6 year period to be extended indefinitely. Notwithstanding this, Centrelink is expected to recover the debt within the shortest possible time-frame.

I would write to centrelink or discuss with them over the phone how they have calculated the date that they became aware of circumstances that gave rise to a debt and actions that were made in the meantime which kept the 6 year limitation period running. If they can't prove that, then you may be able to have the debt statute barred.