Process for debt write-off decision

The following process is to be followed when considering debt write-off.

For an overview of the process, see:

Process for debt write-off flowchart

Step 1

Was the debt or part of the debt the result of an error?

For more information see:

Debt the result of an error

It may not be necessary to contact the client to help you decide this. You may be able to make your decision based on the information held by the Ministry of Social Development.

If the answer is no, record your decision in SWIFTT (Debt recoverable indicator) and continue debt recovery action.

If the answer is yes, the "Recommendation for Current Debt Write-Off" form must be completed:

if the benefit is current, the debt status shows as "recovery undecided" while the debt write-off is being considered or
if the benefit is cancelled, advise Client Support - Debt Management immediately that enforcement of debt recovery is to be suspended until a decision is made on debt write-off

You do not need to advise the client of the debt until a decision is made.

Step 2

Consider all other debt write-off criteria:

You may need to contact the client for more information to determine if these criteria are met.

Step 3

Submit the completed "Recommendation for Current Debt Write-Off" form to the appropriate delegated authority who decides:

whether the debt is recoverable or not and
approves or declines the debt write-off

If the decision is that the debt is recoverable you will need to advise the client of the decision by letter and negotiate debt recovery.

You will need to change the debt status to 'recoverable' in SWIFTT.

Step 4

Decision is that debt is non-recoverable and can be written off.

If the benefit is current:

in SWIFTT:
- change the Debt recoverable indicator to [N]
- the debt status code to [13] Written off - non recoverable, debt established on/after 26/09/02
give all documentation to a debt write off approving officer to check and action in SWIFTT
advise the client by letter that the debt is non-recoverable

If the benefit is cancelled:

advise Client Support - Debt Management that this debt is non-recoverable and debt write off has been approved
send a copy of the completed and approved recommendation form and any other relevant documentation to Client Support - Debt Management who will complete the write-off action on TRACE
advise the client by letter that the debt is non-recoverable

All documentation relating to the process is "critical data" and should be scanned saved and linked to the client's record.