NLIS 5
February 11, 2005
(Executive Council)
(Finance)
Province announces initiative to
collect outstanding debts
Loyola Sullivan, Minister of Finance and
President of Treasury Board, today announced a new initiative to collect
outstanding debts owed to government. Joining six other provinces and the
Northwest Territories, Newfoundland and Labrador is now a participant in the
Federal Refund Set-off Program.
Under the program, when the province has been unable to collect outstanding
debts from individuals, personal income tax refunds may be intercepted on behalf
of the province. Any intercepted funds are sent to the province and applied
against outstanding debts. The Federal GST Credit is also included in this
program; however, provincial benefits paid under the Newfoundland and Labrador
Child Benefit, the HST Credit and the Seniors� Benefit will not be intercepted
to pay provincial government debts.
"Most people do honour their financial commitments to the province; however,
there are instances when individuals ignore outstanding debts. The province is
owed millions of dollars in outstanding debt, and we have an obligation to do
our utmost to collect that money. The Refund Set-off Program will help ensure
that all people meet their financial responsibilities to the province," said
Minister Sullivan. "This new initiative will also help to address concerns
repeatedly raised by the Auditor General about government�s collection efforts."
Outstanding accounts are referred to the Canada Revenue Agency (CRA), which
offers the program on behalf of the provinces. Once the CRA receives the
accounts, the agency will issue notification letters, on behalf of the province,
to affected individuals to inform them of the intended action. Individuals may
contact the provincial government, through the contact information indicated in
the letter, to discuss the validity of the debt or to make repayment
arrangements. If an individual makes appropriate re-payment arrangements,
government will notify CRA to stop the interception process.
This program gives the province the ability to recover debt through personal
income tax refunds, regardless of where a person lives in Canada. In some
instances, individuals have relocated from the province, and government no
longer has current contact information. If a debtor files an income tax return
anywhere in Canada, and that individual has an outstanding account with the
provincial government, his or her tax refund will be eligible for interception.
Minister Sullivan explained government will only refer accounts to the Refund
Set-off Program once all other collection methods have been exhausted. "An
outstanding account can be only referred to CRA once the province has taken all
reasonable actions to collect the debt," he explained. "Government does not want
to cause any undue financial hardship in trying to collect outstanding debt.
Once a notification letter is received, an individual may contact government,
and the case will be reviewed. We have committed to review economic hardship
instances on a case-by-case basis."
Initially, government will forward outstanding accounts from three areas:
student loans, income support overpayments, and school tax arrears. Government
will assess the results and determine whether outstanding accounts from
additional departments will be included in the program..
Media contact: Diane Keough, Communications, (709) 729-6830, 685-4401
2005 02 11
2:55 p.m. |