42Recovery of certain overpayments from third parties

#### 42 Recovery of certain overpayments from third parties (2) This section applies where: (a) the liability of a person (in this section called the debtor) to the Commonwealth in relation to a debt has not been fully satisfied; and (b) there is another person (in this section called the third party): (i) by whom any money is due, or may become due, to the debtor; or (ii) who holds, or may subsequently hold, money for the debtor; or (iii) who holds, or may subsequently hold, money for some other person for payment to the debtor; or (iv) who has authority from some other person to pay money to the debtor. (2A) The first reference in paragraph (2)(b) to another person includes a reference to: (a) the Commonwealth; and (b) a State; and (c) a Territory; and (d) any authority of the Commonwealth or of a State or Territory. (3) The Secretary may, by written notice given to the third party, require the third party to pay to the Commonwealth: (a) a specified amount, not being an amount more than: (i) the amount then due to the Commonwealth in relation to the debt; or (ii) the amount of the money referred to in whichever of the subparagraphs of paragraph (2)(b) is applicable; or (b) a specified amount out of each payment that the third party becomes liable from time to time to make to the debtor until the total of the amounts paid to the Commonwealth under the notice equals the amount then due to the Commonwealth in relation to the debt. (4) A payment required to be made by the notice is to be made within the time specified in the notice, not being a time earlier than: (a) the money concerned becomes due or is held; or (b) 14 days after the notice is given. (5) The third party must not contravene the notice. Penalty: Imprisonment for 1 year. (5A) Subsection (5) does not apply if the party has a reasonable excuse. > Note: A defendant bears an evidential burden in relation to the matter in subsection (5A) (see subsection 13.3(3) of the Criminal Code). (6) The Secretary must give a copy of the notice to the debtor. (7) Contravention of subsection (6) does not invalidate the notice. (8) If the third party makes a payment to the Commonwealth under the notice, the payment is to be taken to have been made with the authority of the debtor and of any other person concerned. (9) If the whole or a part of the debt stops being due to the Commonwealth otherwise than because of a payment made by the third party, the following provisions have effect: (a) the Secretary must notify the third party of the amount that has stopped being due; (b) if paragraph (3)(a) applies to the notice—the amount specified in the notice is to be taken to be reduced, or further reduced, as the case requires, by the amount that has stopped being due; (c) if paragraph (3)(b) applies to the notice—the reference in that paragraph to the total of the amounts paid to the Commonwealth under the notice is to be taken to be a reference to that total as increased, or further increased, as the case requires, by the amount that has stopped being due. (10) If the third party, without reasonable excuse, contravenes the notice, an amount equal to: (a) so much (if any) of the amount required by the notice to be paid by the third party as the third party was able to pay to the Commonwealth but did not pay; or (b) so much of the debt as remains due to the Commonwealth from time to time; whichever is the lesser, is a debt due by the third party to the Commonwealth. (11) If: (a) the third party is indebted to the Commonwealth under subsection (10); and (b) the Commonwealth recovers the whole or a part of the third party’s debt; the debtor’s liability to the Commonwealth in relation to the debt referred to in paragraph (2)(a) is reduced or further reduced, as the case requires, by the amount recovered from the third party. (12) If, apart from this section, money is not due or payable on demand by the third party unless a condition is fulfilled, the money is to be taken, for the purposes of this section, to be due or payable on demand, whether or not the condition has been fulfilled. (13) If a person has unsatisfied liabilities to the Commonwealth in relation to more than one debt, the Secretary may: (a) for the purposes of this section, treat the debts as a single debt; but (b) apportion any amount recovered under this section in relation to the debts in such proportion as the Secretary considers appropriate. (14) An apportionment made by the Secretary under subsection (13) must be made in writing.