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VIC Centrelink Family Tax Benefit Overpayment Debt from 2001

Discussion in 'Debt and Bankruptcy Law Forum' started by Stephen Bell, 23 July 2015.

  1. Stephen Bell

    Stephen Bell Member

    23 July 2015
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    Hi. Centrelink today (23 July 2015) sent me a letter stating that I had been overpaid Family Tax Benefit (FTB) in 2001/2002 and that I now owe them $2092.50. This is the first I've been advised about it and it was from 13 years ago.

    Is there any way I can request that Centrelink waive the amount payable due to the time taken to advise me of the debt? It's a little hard to dispute their claim after so much time.
  2. Sophea

    Sophea Guest

    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.

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