7.2.5 Debt Recovery from Income Tax Refund

Summary

This topic provides information about offsetting an income tax refund of the debtor or another consenting person (1.1.P.80) to recover an FTB debt (1.1.D.60) or a CCS or ACCS 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.

Income tax refunds are also used to offset CCS and ACCS debts.

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…
a debtor,
  • 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 (1.1.F.02) 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: 2 July 2018