Civil Justice

8 – Debt recovery

8 – Debt recovery

Part 1, Chapter 7 sets out the methods through which the Agency can recover a debt.

Debts due to the Agency

Section 182 provides that payments of an NDIS amount made to persons not entitled to the NDIS amounts are debts due to the Agency.

‘NDIS amount’ is defined in s. 9 as an amount paid under the NDIS, in respect of reasonable and necessary supports under a participant’s plan.

A person may not be entitled to an NDIS amount where 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 (s. 182(2)).

If a person does not comply with s. 46(1), by failing to spend an NDIS amount in accordance with the participant’s plan, the debt due will be an equal amount (s. 182(3)).

The NDIS rules may also provide that a failure to retain records in relation to an NDIS amount under s. 46(2) will result in a debt due of an equal or lesser amount (s. 182(4)).

Methods of recovery

The Act provides for several methods of recovery of debts:

  • Legal proceedings – Section 183 provides that any debt under the Act is recoverable by the Agency, by means of legal proceedings brought by the CEO[†] within the ‘recovery period’. In most cases, the recovery period will be six years from the date on which an officer becomes aware, or could reasonably be expected to have become aware, of the circumstances giving rise to the debt.

This period will reset if there is part payment or acknowledgement of the debt, or if prescribed activities take place within the recovery period.

  • Arrangement for payment – Section 184 permits the CEO to enter into an arrangement with a person about how the debt is to be repaid. This would normally include a timetable for repayment.

The CEO may terminate or alter the arrangement at the debtor’s request, or after giving 28 days notice. If the CEO 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)).

  • Recovery from financial institution – Section 185 enables the CEO to recover debts from financial institutions where the payment was made to an account in error or where the recipient has died before the payment was made.

Information relating to debts

Section 186 gives the CEO power to require a person who owes a debt to the Agency to provide information or documents about their financial situation and also to inform the Agency of a change of address within 14 days.

Section 187allows the CEO to require a person who may have information or documents relevant to the location of a person who owes a debt to the Agency, or relevant to the debtor‘s financial situation, to give the information or documents to the Agency. The CEO must have reasonable grounds to believe that the person has the information or custody or control of the document.

Any requirements for information relating to debts must be made by written notice (s. 188). The notices 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, and that the notice is given under s. 188.

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 (s. 189). If provision of the information or document may incriminate the individual or expose them to a penalty, this would amount to a reasonable excuse (s. 189(3)).

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

Under s. 191 of the Act, the CEO has the power to waive the right to recover all or part of a debt in the following circumstances:

  • error – where debt attributable solely to administrative error and debtor received the payment in good faith, and six weeks has lapsed since the first payment or end of the notification period, where person has complied with a notification obligation (s. 192)
  • small debts – if debt is likely to be less than $200 and it is not cost effective to take action to recover the debt (s. 193)
  • settlements – if the Agency 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 for the debt to be paid by instalments and the total of the instalments is at least the current value of the amount outstanding (s. 194)
  • special circumstances – if 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 (s. 195).

Unlike the write-off of a debt, which does not prevent the CEO subsequently taking action to recover a debt, a waiver of a debt is a permanent bar to the recovery of the debt (s. 191).

Further information

View:

  • National Disability Insurance Scheme website (
  • National Disability Insurance Scheme Act 2013 (

Disclaimer.The material in this publication is intended as a general guide only. The information contained should not be relied upon as legal advice, and should be checked carefully before being relied upon in any context. Victoria Legal Aid expressly disclaims any liability howsoever caused to any person in respect of any legal advice given or any action taken in reliance on the contents of the publication.

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 Any references to ‘the Agency’ in this fact sheet are to the National Disability InsuranceAgency (NDIA).

[†] Any references to ‘the CEO’ in this fact sheet are to the Chief Executive Officer of the NDIA, or any officer exercising powers or functions of the CEO under a delegation pursuant to s. 202 of the Act.