Attention taxpayers! ATO plans to use your tax refund with this measure
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As the end of the financial year approaches, many look forward to receiving a tax refund, a little financial boost that can make all the difference. However, for some, this year's tax time might bring a surprise.
Taxpayers are being cautioned that the Australian Taxation Office (ATO) may automatically use tax refunds to pay off outstanding debts with Services Australia.
This measure could affect those already making repayments to Services Australia, including debts related to Family Tax Benefit (FTB), Child Care Subsidy (CCS), and Child Support.
Even if you have a repayment plan in place, don't be surprised if your expected tax return has been significantly reduced.
Services Australia has been upfront about this process, stating on social media, 'If you have an outstanding debt with us, we may take money from your tax refund to repay it.'
‘Legally, we have to recover money that’s owed to us.’
‘Sometimes we’ll use your tax refund to reduce the amount you owe us—even if you have a repayment arrangement in place.’
This recovery method targets specific groups: those receiving FTB or CCS, individuals with overdue Child Support debt, and former customers who have stopped making repayments on debt. However, there are exceptions.
For instance, if your debt repayments have been paused due to a disaster or emergency event, or if you're awaiting a formal review, your tax refund will not be used for debt recovery.
For families receiving assistance payments, it's important to note that Services Australia will check for overpayments and debts when balancing your FTB or CCS. This process has already started for FTB and will begin for CCS from mid-August.
‘We’ll recover any overpayments or existing debts you owe us before paying you any top-ups, supplements or lump sums,’ Services Australia said.
Former welfare recipients not currently repaying their debts to Services Australia will be notified of the debt recovery through a ‘letter afterwards to explain it’.
‘It’ll also appear on your Notice of Assessment from the Australian Taxation Office as a “credit offset to Centrelink”,’ Service Australia added.
Have you experienced your tax refund being used to offset debts? Share them with us in the comments below!
Taxpayers are being cautioned that the Australian Taxation Office (ATO) may automatically use tax refunds to pay off outstanding debts with Services Australia.
This measure could affect those already making repayments to Services Australia, including debts related to Family Tax Benefit (FTB), Child Care Subsidy (CCS), and Child Support.
Even if you have a repayment plan in place, don't be surprised if your expected tax return has been significantly reduced.
Taxpayers are warned that the ATO may automatically use tax refunds to pay off outstanding debts. Credit: Shutterstock
Services Australia has been upfront about this process, stating on social media, 'If you have an outstanding debt with us, we may take money from your tax refund to repay it.'
‘Legally, we have to recover money that’s owed to us.’
‘Sometimes we’ll use your tax refund to reduce the amount you owe us—even if you have a repayment arrangement in place.’
This recovery method targets specific groups: those receiving FTB or CCS, individuals with overdue Child Support debt, and former customers who have stopped making repayments on debt. However, there are exceptions.
For instance, if your debt repayments have been paused due to a disaster or emergency event, or if you're awaiting a formal review, your tax refund will not be used for debt recovery.
For families receiving assistance payments, it's important to note that Services Australia will check for overpayments and debts when balancing your FTB or CCS. This process has already started for FTB and will begin for CCS from mid-August.
‘We’ll recover any overpayments or existing debts you owe us before paying you any top-ups, supplements or lump sums,’ Services Australia said.
Former welfare recipients not currently repaying their debts to Services Australia will be notified of the debt recovery through a ‘letter afterwards to explain it’.
‘It’ll also appear on your Notice of Assessment from the Australian Taxation Office as a “credit offset to Centrelink”,’ Service Australia added.
Have you experienced your tax refund being used to offset debts? Share them with us in the comments below!
