The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia.

5.3.1.20 Taxation deductions

Reasons for taxation deductions

Tax deductions from social security payments are made if:

  • the Commissioner of Taxation serves a notice, OR
  • the recipient asks for deductions to be made and paid to the Commissioner.

Act reference: SSAct section 23(1)-'social security payment'

Notice from Commissioner of Taxation

The Commissioner can serve a notice on anyone who holds money belonging to a taxpayer who owes tax. The SSAct requires the department to comply with these notices.

Act reference: SS(Admin)Act section 238 Payments to the Commissioner of Taxation or the Child Support Registrar

Taxation Administration Act 1953 Schedule 1 section 260-A From third party

Deductions requested by a recipient

Recipients who request tax deductions from their payment must do so either orally or in writing, specifying the fortnightly amount. If the recipient requests that the full amount of pension be withheld, a new authority is required after any CPI pension increase. Recipients may cancel or vary deduction amounts orally or in writing at any time.

A recipient's request to commence, vary or cease tax deductions from payments MUST be clearly recorded on their record.

A recipient MUST supply written permission from the Deputy Commissioner of Taxation before deductions can commence if the recipient:

  • is still employed and has a current employment declaration with an employer, AND
  • requests that less tax be taken out than the standard rate.

Date of effect of tax deductions

Tax deductions take effect from the first available day after the request has been made.

Refunds of tax

Refunds of tax can only be made if tax was deducted as a result of administrative error or omission. The recipient's tax record must also be adjusted.

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