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    Suspended debts

    Centrelink has the ability to suspend, either for an indefinite or specified period of time, all action to recover a debt. This is often known as writing-off the debt, however, suspending the debt does not completely extinguish it.

    Under what circumstances will Centrelink suspend a debt?

    Debts can only be suspended or written-off where:

    • the debt cannot be recovered at law e.g. a debtor has died leaving no estate or insufficient funds in the estate to pay their debt;
    • the person has no capacity to repay the debt - a person will be taken to have the capacity to repay the debt unless they can demonstrate severe financial hardship if deductions are made from Centrelink payments;
    • the person cannot be found;
    • it is not cost effective for Centrelink to take action to recover the debt

    See Social Security Act 1991 (Cth) s 1236(1A).

    Does suspending a debt completely cancel it?

    Suspending or writing-off a debt does not completely extinguish a debt. The debt remains enforceable but a decision has been made not to pursue it, either indefinitely or for a specified period. In either case the decision can be reversed and debt recovery proceedings can recommence at any time in response to a change in the debtor's circumstances [see Social Security Act 1991 (Cth) s 1236(3)].

    Suspended debts  :  Last Revised: Thu Sep 20th 2018
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