If a debt arises because of subsection 28(2) or 28(6) (which deal with when income tax returns have not been lodged), a FA debt may be written off if:
Act reference: FA(Admin)Act section 95(2) Secretary may write off debt if debt irrecoverable or debt will not be repaid etc., section 95(4A) Secretary may write off subsection 28(2) or (6) debt if claimant and partner separate
If the Secretary decides to write off a debt, the date of effect is either:
Act reference: FA(Admin)Act section 95(5) When decision under subsection (1) takes effect
Writing off a debt does not finalise the debt. Action may subsequently be taken for its recovery if the Secretary determines it is reasonable to do so. If action is taken to recover a written off debt it must be done within 6 years from the date the debt was raised.
Example: Tyrone has a debt to the Commonwealth. His debt has been written off because his whereabouts for the past 3 years were unknown. Tyrone then makes a claim for family assistance and provides a copy of his tax return from the previous financial year. The Secretary may take action to recover the amount that was previously written off.
Act reference: FA(Admin)Act section 95(6) Debt that has been written off may be recovered
Last reviewed: 30 April 2012