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Debts owed to Public Authorities

Part 8 of the Fines Enforcement and Debt Recovery Act 2017 (SA) enables the Fines Enforcement and Recovery Unit (The Unit) to recover a civil debt on behalf of a public authority when requested to do so [see Fines Enforcement and Debt Recovery Act 2017 (SA) s 49]. This may occur, for example, when a person owes a civil debt to a state government agency, such as to the Department for Education for unpaid school fees. The Department can then authorise The Unit to recover the debt on the Department's behalf.

The Unit can only exercise their powers of recovery when they are specifically requested to do so by the public authority, and only in respect of debts that are $100 000 or less.

A public authority is defined as:

  • An administrative unit or other instrumentality of the Crown;
  • An incorporated or unincorporated body established or subject to control or direction by the Governor, a Minister or any agency of the Crown;
  • A person or body prescribed the regulations as a public authority for the purposes of this Act.

See Fines Enforcement and Debt Recovery Act 2017 (SA) s 48.

Examples of public authorities include state government agencies, such as the Department for Education, the Department for Child Protection, or Housing SA.

Where a public authority has issued an invoice to a debtor for an alleged debt, and has allowed the debtor a reasonable opportunity to pay the debt, the authority may provide The Unit with notification of the debt if it remains unpaid [see s 49(2)]. This notification transfers the debt recovery process from the public authority to The Unit.

It is not compulsory for a public authority to transfer their debt recovery processes to The Unit - it is an opt-in service.

There is no definition in the Act of what constitutes a reasonable opportunity.

Civil Debt Determinations

Once The Unit receives notification of the debt, they can make a civil debt determination [s 49(3)]. A letter is sent to the debtor advising them of their options in paying the debt and the consequence if they fail to make payment.

What options does a debtor have after receiving a civil debt determination?

After receipt of the written civil debt determination, a debtor can:

  • enter into a payment plan or other voluntary agreement with The Unit to pay off the debt [s 57]; or
  • pay the debt in full; or
  • apply to vary or revoke the determination by application to the Magistrates Court [s 50].

A debtor who fails to undertake any of the above options will be taken to have admitted liability for the debt [see s 51(2)], and The Unit can exercise their enforcement powers as contained in Part 8, Division 5 of the Act.

Voluntary payment arrangements

A debtor can make a voluntary arrangement with The Unit to pay the debt in instalments (over a period of not more than 12 months), to enable the taking of a charge over land, or to surrender property to The Unit [s 57(1)]. There is a fee payable to enter into such an arrangement with The Unit [s 57(1)].

A voluntary arrangement can be varied by agreement between the debtor and The Unit [s 57(5)].

If a debtor fails to comply with a voluntary arrangement for a period of 28 days or more, the arrangement terminates, and The Unit may take enforcement action to recover the debt [ss 51(2)(b) and s 57(9)].

Disputing a Civil Debt Determination

Within one month of receipt of a written civil debt determination, a debtor can apply for a revocation or variation of the determination by application to the Magistrates Court [s 50(1)]. This application is a minor statutory proceeding heard by the Minor Civil Claims jurisdiction of the Magistrates Court, unless the amount owed by the debtor exceeds $12 000 [s 50(5)].

There is no fee payable for making an application for review of a civil debt determination [s 50(6)].

Upon application the Court can vary, revoke or confirm the civil debt determination [50(3)]. If the Court varies or confirms the civil debt determination, The Unit can then exercise their enforcement powers to recover the debt as per Part 8, Division 5 of the Act.

Enforcement Action

A debtor who, within one month of receipt of a civil debt notification, fails to either:

  • Enter into a payment plan with the Unit to pay the debt; or
  • Make an application to the Magistrates Court for variation or revocation of the determination

may find themselves subject to enforcement action by The Unit [s 51(1)(a)]. Similarly, where the Magistrates Court has confirmed or varied the civil debt determination, The Unit can exercise their enforcement powers [see s 51(1)(b)].

Where a debtor has entered into a payment plan to pay the debt, but the arrangement is then terminated, the debtor is taken to have admitted liability for the debt and The Unit can exercise their enforcement powers to recover the debt [see s 51(2)(b)].

The enforcement powers of The Unit, as contained in Division 5 of the Act, include:

  • Issuing a written enforcement notice requiring the debtor pay the debt by instalments (where the debtor has the means to do so) [s 61(1)];
  • Garnishing money owing to a debtor from a third person. Salary or wages can only be garnished by consent of the debtor [s 62];
  • Seizing and selling the land or personal property of the debtor [s 63];
  • Placing a charge over real property or other property that the debtor has a interest in [ss 64 and 65].

Enforcement Notices

Prior to exercising any enforcement power, The Unit must provide the debtor with a written enforcement notice advising them of the enforcement action that will be undertaken as well as their review rights in relation to the notice [see ss 51(3) and 51(4)].

A debtor aggrieved by the enforcement notice may, within 30 days of receipt of the notice, apply to The Unit for an internal review of the notice [s 52]. The Unit may confirm, vary, or revoke the enforcement notice [s 52(4)].

Review of decision to take enforcement action

A debtor aggrieved by a decision of The Unit on internal review may apply to the Magistrates Court for a review of that decision [s 53(1)]. An application to the Court must be made within 28 days of the decision being made (or 28 days following receipt of the written reasons for the decision, if a request for reasons was made) [s 53(4)]. There is no fee payable for lodging an application pursuant to section 53 of the Act [s 53(7)].

Costs

Any costs incurred by The Unit in exercising their powers and functions under Part 8 of the Act are added to and form part of the debtor's debt [s 55].

    Debts owed to Public Authorities  :  Last Revised: Fri Feb 1st 2019
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