7.2.5 Debt Recovery from Income Tax Refund
This topic provides information about offsetting an income tax refund of the debtor or another consenting person to recover an FTB debt (1.1.D.60) or a CCB debt.
Debts recovered from an income tax refund
FTB debts may be recovered from the debtor's or another consenting person's income tax refund.
From 1 July 2007, available income tax refunds are also used to offset CCB and CCR debts determined on or after 1 July 2006.
The following table outlines the conditions under which a debt can be recovered from a debtor's, or another consenting person's, income tax refund.
|Debts under Part 4 can be recovered from a tax refund owed to…
||Under the following conditions…
- up to the whole amount of the income tax refund can be used to repay the debt,
- the amount deducted from the refund is the amount applied to the debt,
- income tax refunds may automatically be offset against any category of FA and other Commonwealth debts.
|another consenting person,
- the person must consent to the deduction from their income tax refund, and
- they may revoke the arrangement at any time,
- the amount deducted from the person's income tax refund is applied to the debtor's debt,
- the income tax refund may be offset against any category of FA debt.
Act reference: FA(Admin)Act section 87 Application of income tax refund owed to person, section 93 Application of income tax refund owed to another person
Policy reference: FA Guide 7.2.1 Debt Recovery - General Provisions
Last reviewed: 3 January 2017