Debts Remitted for COVID Disability Overpayments

Summary#

This is the Remission Order from Debts Owed by Persons with Disabilities, their Caregivers or their Estates: SI/2022-21. It cancels debts owed to the federal government that arose from accidental overpayments of a one-time COVID-19 disability payment. The cost is estimated at $1.58 million, with up to $2 million available to cover the remission.

What it does#

• Remits (forgives) debts owed to the Crown by people with disabilities, their caregivers, or their estates when those debts come from overpayments of the one-time disability payment.
• Explains the overpayments were caused by an administrative error when combining files for the seniors’ one-time payment and the disability payment. That error led to some people getting more than the maximum combined amount of $600.
• Provides the main numbers involved:
  • 17,152 disability payments were calculated incorrectly.
  • 11,984 of those were intercepted, corrected and reissued, avoiding $5,580,100 in overpayments.
  • 5,166 overpayments could not be intercepted, resulting in $1,575,000 in overpayments that are now being remitted.
• Notes the payments were issued automatically to eligible people between October 2020 and April 2021, based on eligibility as of July 1, 2020.
• The action was taken under the Financial Administration Act.

Who's affected#

• People with disabilities who received the one-time COVID-19 disability payment and were later identified as overpaid.
• Caregivers or estates of those people, if they received the payment on behalf of someone else.
• Public trustees who handled bulk payments were involved earlier (many of those bulk payments were intercepted and fixed).
• Many of the individual overpaid recipients are low-income seniors: about 4,400 people (roughly 85% of those overpaid) also receive the Guaranteed Income Supplement or Allowance, so they are likely to be financially vulnerable.

Why it matters#

• It prevents the government from trying to collect small debts from people who are unlikely to be able to repay them. That reduces financial stress on already vulnerable households.
• It preserves the original intent of the one-time payment: to help people with disabilities cover extra COVID-19 costs.
• The federal department responsible for benefits (the Department of Employment and Social Development) will cover the cost from existing resources, and the remission was registered on April 13, 2022.