This topic provides information on how a debtor's capacity to repay a debt (1.1.D.60) may affect its recovery. If repaying the debt will cause severe financial hardship (1.1.S.45), then the debt may be written-off.
Policy reference: FA Guide 22.214.171.124 Writing-off a Debt
Unless recovering a debt will cause severe financial hardship, a debtor is considered to be able to repay the debt if it can be recovered using any of the following methods:
Act reference: FA(Admin)Act section 95(4) Secretary may write off debt, section 84 Deduction from debtor's FTB, section 84A Setting off FA against debt owed, section 87 Application of income tax refund owed to person, section 87A Setting off debts of an approved child care service against child care service payments
Last reviewed: 30 April 2012