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The Tax Man Or The Ex?


We are paying an ATO debt only incurred this past financial year - we make regular payments.

We were wondering if my husband's tax refund would be placed against this or would it go to the ex's for child support debt.

Which comes first tax man or child support?


I don't know Jodie, but it would surprise me if were anything other than both. Perhaps though there is a way to delay one or both. Perhaps re-negotiate with the tax man and perhaps under special circumstances with the CSA. Although again I very much doubt that it will be anything but pay us yesterday from both. Hopefully someone can put me in my place and show me to be wrong.
My guess, and it is only a guess, is that it would be absorbed by the tax office first. Only because, the refund would be processed by the agency and come off the debt before it even left the agency. It would be gone before you or CSA would be notified about it.

I may be wrong and there may be some underlying legislation that I am ignorant of. I am basing my assumption on years of work in govvy.

Junior Executive of SRL-Resources

Executive Member of SRL-Resources, the Family Law People on this site (Look for the Avatars). Be mindful what you post in public areas. 

NSW debt expiration

Has anyone heard about a NSW State law about debt expiration that means that after a few years any debt, including Commonwealth, expires?

Is this true?

Does it work?

I can't imagine the CSA or federal government letting this slip past the keeper.
Hi Matrix, below is a link to the Consumer Credit Legal Centre NSW.

ERROR: A link was posted here (url) but it appears to be a broken link.

Here is an extract from the site

The Limitation Act 1969 (NSW) places time limits on the rights of a creditor to bring an action for the recovery of debts.

In most cases a creditor or a debt collector must recover the debt, or commence court action to recover the debt, within 6 years of:

- the date on which the debt first arose or

- the date you last made a payment or

- the date you acknowledged the debt in writing

The 6 years runs from whichever event from the above list occurs last.

If the creditor does not commence court action within the six years, you will have a complete defence to the debt. There is nothing to prevent the creditor commencing court action, it is up to you to raise the Limitation Act defence, if it applies.

The site also has links to different resources.

CSA have first cut

Well it got the better of me so I rang the ATO this morning to enquire as nobody really knew the answer to my question… are you ready?

The CSA gets it first!  I nearly fell off my stool.  Well there you go.  They said the debt to the children supersedes an ATO debt. Once a refund becomes available they make that information available to the CSA.  The CSA then choose to take it to offset any debt.  If there is no debt it is then placed against an ATO debt.

Well I'll be… lol

Lifeinsight - I did happen to ask that the only debt that will win ahead of ato is child support, in other words csa gets the money before the tax man. So if you have a hecs debt and a child support debt - csa gets it and you still have to pay your hecs.

Superannuation also gets it before ATO from my experience.

To me it sounds like your debit is in 1 ATO account like a business account and your credit is in a personal ATO account.

If the business ATO account is a partnership then you have an ability to disperse Tax credits between the partners at the time of the Partnership Return, and the only ATO debit would be for GST.

If the business ATO account is a Company then that Tax liability should have been paid before credits were paid to the directors.

This is a tricky one and more detailed information is required for a proper assessment of how to deal with the ATO debt v the CSA debt. Have you sought a changed circumstances amendment from CSA, that would require a 15% plus reduction in your income and under special circumstances can be back dated.

If the ATO debit is from past personal returns and create a negative balance in the personal account there will be no return other than what exceeds the past debit. Look at items E & G on your Notice of Assessment, it is only when a credit is at L that there is a credit hence what I was saying that is when CSA and Superannuation get first bite, then you.

Things do change so I might have got it wrong.
CSA sure do get the money first… I recently did my tax return and was expecting a $450 refund.

I received a letter from CSA stating that due to my outstanding child support, they are keeping the refund. The thing is, my child support is currently paid up to March 2008 and my next payment is early April.  What they have done is deemed my next child support payment as outstanding and kept my refund.

I know that this will mean that I pay $450 less in April, but the point is I did not have an outstanding debt that warrant them keeping my Refund.
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