Write-off guidelines for irrecoverable debts

What is a ‘write-off’?

Under this guideline, a write-off means that a debt that was owed to Legal Aid NSW has been waived and is no longer recoverable, pursuant to s 9.18 of the Government Sector Finance Act 2018.

A write-off can occur in the following circumstances:

1. Costs of the Independent Children’s Lawyer

When a costs order is made in family law proceedings for a parent to pay the costs of the Independent Children’s Lawyer to Legal Aid NSW, the debt will be written off if the parent would be eligible for a grant of legal aid under the Legal Aid NSW means test, generally meaning the parent receives a Centrelink benefit and has no other assets or income.

2. Costs orders for third parties to pay the costs of a legally aided person to Legal Aid NSW

When a costs order is made for a person to pay the costs of a legally aided person to Legal Aid NSW, the debt will be written off if the person would be eligible for a grant of legal aid under the Legal Aid NSW means test, generally meaning the person receives a Centrelink benefit and has no other assets or income.

3. Secured costs

Legal Aid NSW’s contribution policy requires a client who is the registered owner of a property to provide security for the costs of their matter in certain types of matters. This policy is based on the likelihood that when the property is sold, the client will have access to sufficient funds to pay the amount owed without experiencing undue financial hardship.

It is only at the time that a property is being sold that Legal Aid NSW is able to determine whether the contribution can be paid by the client because that is when we know the amount the client will receive from the sale.

It is Legal Aid NSW policy that all decisions in relation to a request for a secured debt to be written off are to be made at the time the property is sold. Under the Attorney General’s Financial Delegations, a secured debt can only be written off when the client is not receiving sufficient funds to pay the amount owed to Legal Aid NSW.

4. Client contributions

Legal Aid NSW’s Contribution Policy imposes contributions on clients:

• at the beginning of the grant based on the client’s means; and
• at the end of the matter if the client falls under one of the categories in Contribution Policy 3: What is a contribution to legal costs?

The contribution policy applies to Legal Aid NSW clients who are in financial hardship. A client contribution will only be written-off if the client has exceptional financial/medical/personal circumstances.

Delegations

Write-off delegations are found in Schedule 3 of the Financial Delegations, which is available to staff on the intranet.