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Debt recovery

Information about how the National Disability Insurance Agency collects money that people or companies owe.

The National Disability Insurance Scheme (NDIS) has several ways to recover a debt that is owed to it. The various methods of debt recovery are set out in Part 1 of Chapter 7 of the National Disability Insurance Scheme Act 2013 (Cth)(opens in a new window).

Debts due to NDIS

Any payments made by NDIS (called an 'NDIS amount') to a person who is not entitled to be paid becomes a debt due to the agency. An ‘NDIS amount’ is defined as an amount paid under NDIS, in respect of reasonable and necessary supports under a participant’s plan.

A person may not be entitled to be paid if the payment was made in error, there has been a contravention of the Act, or false or misleading statements or misrepresentation, or the participant died before the payment was made.

See ss. 9, 182—National Disability Insurance Scheme Act 2013 (Cth)(opens in a new window).

If money not spent according to the plan

If a person fails to spend money according to their plan then that amount will have to be repaid.

See ss. 46, 182—National Disability Insurance Scheme Act 2013 (Cth)(opens in a new window).

How money may be recovered

The Act provides for several methods of recovery of debts.

NDIS may recover any debt owed to it by issuing legal proceedings. Usually they have 6 years from the date that an NDIS officer becomes aware, or could reasonably be expected to have become aware, of the circumstances giving rise to the debt.

Time starts again if the debtor makes a part payment or acknowledges the debt, or if prescribed activities take place within the recovery period.

See s. 183—National Disability Insurance Scheme Act 2013 (Cth)(opens in a new window).

Arrangement for payment

NDIS may enter into an arrangement with a person about how the debt is to be repaid. This would normally include a timetable for repayment.

They may end or change the arrangement at the debtor’s request, or after giving 28 days notice.

If NDIS is satisfied that the debtor has failed to disclose information about their true capacity to repay the debt, the CEO may terminate without notice (s. 184(4)).

See s. 184—National Disability Insurance Scheme Act 2013 (Cth)(opens in a new window).

Recovery from financial institution

NDIS may recover debts from financial institutions if the payment was made to an account in error or where the recipient has died before the payment was made.

See s. 185—National Disability Insurance Scheme Act 2013 (Cth)(opens in a new window).

Information about debts

NDIS can require a person who owes a debt to provide information or documents about their financial situation and also to inform the Agency of a change of address within 14 days.

NDIS may (by notice in writing) require any person to hand over information or documents if it reasonably believes they:

  • may help to locate a person who owes a debt to National Disability Insurance Agency, or
  • are relevant to the debtor‘s financial situation.

The notice must specify the nature of the information or document required, how the information or document is to be given to the Agency, how long the person has to provide the information or document, who they need to give it to.

It is an offence to refuse or fail to comply with a requirement to give information or produce a document, unless the person has a reasonable excuse. If provision of the information or document may incriminate the individual or expose them to a penalty, this would amount to a reasonable excuse.

See ss. 187, 188, 189—National Disability Insurance Scheme Act 2013 (Cth)(opens in a new window).

Non-recovery of debts

Section 190 allows the CEO to write-off a debt in the following circumstances:

  • the debt is irrecoverable at law
  • the debtor has no capacity to repay the debt
  • the debtors whereabouts are unknown, or
  • it is not cost effective to take action to recover the debt.

If a debt is written off by the CEO, action may still be taken to recover the debt at any time (s.190(5)).

Waiver of debts

A waiver of a debt is a permanent bar to the recovery of the debt. This is different to 'writing off' a debt as a write-off does not prevent NDIS from subsequently taking action to recover a debt.

See s. 191—National Disability Insurance Scheme Act 2013 (Cth)(opens in a new window).

NDIS may waive the right to recover all or part of a debt in the following circumstances:

Error

Where debt was due to an administrative error and debtor received the payment in good faith, and 6 weeks has lapsed since the first payment or end of the notification period, where person has complied with a notification obligation.

See s. 192—National Disability Insurance Scheme Act 2013 (Cth)(opens in a new window).

Small debts

If a debt is likely to be less than $200 and it is not cost effective to take action to recover the debt, the debt may be waived.

See s. 193—National Disability Insurance Scheme Act 2013 (Cth)(opens in a new window)

Settlements

If NDIS has agreed to settle a claim against a debtor for less than the full amount, the CEO must waive the right to recover the difference. The CEO is also required to waive debts where at least 80% of the amount owing has been paid and the debtor is unable to pay any more, and where the debtor and the agency agree that the debt to be paid by instalments and the total of the instalments is at least the current value of the amount outstanding.

See s. 194—National Disability Insurance Scheme Act 2013 (Cth)(opens in a new window).

Special circumstances

If a debt did not arise in whole or part as a result of a contravention of the Act, or a false or misleading statement or a misrepresentation, and there are special circumstances, other than financial hardship, and the CEO is satisfied that a waiver is more appropriate than writing off the debt.

See s. 195—National Disability Insurance Scheme Act 2013 (Cth)(opens in a new window).

More information

Legislation

National Disability Insurance Scheme Act 2013 (Cth)

  • s. 9—defines an NDIS amount
  • s. 46—money must be spent according to the participant's plan
  • Chapter 7, Part 1—Debt recovery
  • s. 182—debts due to the agency
  • s. 183—legal proceedings
  • s. 184—arrangement for payment of debt
  • s. 185—recovering amounts from financial institutions
  • s. 187—power to obtain information about a person who owes a debt to the agency
  • s. 188—written notice f requirement
  • s. 189—offence for refusal or failure to comply with requirement
  • s. 190—NDIS may write off debt
  • s. 191—debt may be written off
  • s. 192—waiver of debt arising from error
  • s. 193—waiver of a small debt

See National Disability Insurance Scheme Act 2013 (Cth)(opens in a new window).

Reference

VLA Fact sheet—Debt recovery

Fiona Brice, Professional Support Lawyer for Civil Justice has drafted several fact sheets that summarise the scheme.

To access this fact sheet see 'NDIS resources' in Practice resources—Civil justice resources—National Disability Insurance Scheme(opens in a new window).

Updated