Clause 6. Deduction notices

6

Deduction notices

(1)

This clause applies to the issue of a deduction notice to recover a debt.

(2)

Where it is determined that the method of debt recovery is the issue of a deduction notice, MSD should send a written notice to the debtor, stating that the debt is to be recovered, specifying the amount of the debt, asking the debtor to contact the department so that arrangements for recovery can be made, and advising the debtor of his or her review and appeal rights in respect of the debt.

(3)

(revoked)

(4)

If no response satisfactory to MSD is received within two weeks of that notice being sent, MSD should send a further written notice informing the debtor that he or she has 10 days to contact the department and make satisfactory arrangements for the repayment of the debt, and that if he or she does not do so then a deduction notice may be issued.

(5)

A deduction notice for recovery of debt should be issued to a debtor's employer or any other person who is the provider of payments of income or weekly loss of earnings compensation to the person on a regular or intermittent basis in preference to a bank, unless recovery of the debt from money due to the debtor by a bank is the only realistic option available in the circumstances. Deductions from bank accounts will be lump sum deductions.

(6)

For any deduction notice issued under section 353(b) of the Act and regulation 217, the amount of the deduction set out in the notice must be based on the amount of the debt, and in determining the amount to be deducted, MSD must take into account the debtor's financial circumstances, the known outgoings of that person (such as essential automatic payments, home mortgage repayments, etc), and the amount that the debtor could reasonably be assumed to require to live on.

(6A)

Before a deduction notice may be issued to a bank, MSD must check the balances in the debtor's various bank accounts.

(7)

If a debtor approaches the department claiming that a deduction notice is causing undue hardship, MSD should review the issue of the deduction notice taking into account any alternative method of payment offered by the debtor.

(8)

Nothing in subclauses (2) to (6) prevents MSD from carrying out his or her duty to consider each case on its own individual circumstances, and in special circumstances (for example, where a debtor is about to leave the country) to not follow subclauses (2) to (4).

(9)

Subclauses (2) to (6A) shall not apply if at any stage the debtor has given his or her consent to a deduction notice being issued.

(10)

MSD must not issue a deduction notice for recovery of a debt-

(a)

if the debtor has made an application for a review under section 391 of the Act or lodged an appeal under section 397, 398 or 399 of the Act in respect of the debt that has not yet been decided; or

(b)

if recovery of the debt from the debtor has been temporarily deferred under regulation 210.

(11)

In this clause,-

consent means consent in writing or, if given orally, confirmed by the department in writing

debt has the meaning in clause 3(1) and includes-

(a)

an amount for which a deduction notice may be issued under paragraph (d) or (e) of the definition of eligible debt due to the Crown in regulation 216; and

(b)

a debt due to the Crown in respect of an allowance or student loan that may be recovered by the issue of a deduction notice pursuant to Schedule 9, clause 6(2)(e) of the Education and Training Act 2020

debtor means a person in respect of whose debt a deduction notice may be issued

(revoked)