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What happens to C$A debt if payer dies?

Here's a curly question that I'm hoping someone can help with :)

* Payer has current CS debt
* Payer has several outstanding tax returns - the lodgement of these is most likely to increase the debt, even after any tax refunds are applied to the debt
* Payer has recently been diagnosed with an aggressive and typically fatal form of cancer - the average life expectancy is 5 months

Now I get that the death of the liable parent is a terminating event. But what happens to the debt, given that it is actually a debt to the commonwealth?

And if the outstanding tax returns are not lodged and the payer does pass away, what happens then?


I can't find anything specific/helpful in CS legislation.


Thanks in advance

"Decide that you want it more than you are afraid of it."
Bill Cosby
 :thumbs:
To my knowledge all debts are part of the settlement in a persons estate. So if there are assets to be sold these will be to pay any debt and then what is remaining is probated to any beneficiries in the will.
No estate or saleable things means you can not get money from the dead.
If they have the time they can sell or transfer interests before death.
Apparently the CSA does not have the authority to remit/release a debt to the Commonwealth. As such the debts of the deceased are, unless matters have changed recently, part, and a significant part, of the debt owed. What I'm not sure about, although I strongly suspect that it is the case, is if penalties and interest continue to be applied.

The CSA may chase the person's estate for money owed. However, it appears that Superannuation is excluded. The CSA would have to issue a section 72A notice and perhaps they would be unable to do so as 72A(5) requires the registrar to give notice to the debtor.

A termination event doesn't stop the CSA from applying tax returns and adjusting/reconciling the debt. However, the completion of outstanding tax returns is the responsibility of the executor of the Estate.



Thank you kalimnadancer and MikeT

Sounds like the best I can do is push for the outstanding tax returns to be lodged and then sit back and leave it to C$A. There will not be much to the estate apart from Superannuation.

This has all thrown me for a loop as I had already intended to apply to the courts to either enforce tax return lodgement or set his ATI for those unknown years (all are more than 18 months ago).

"Decide that you want it more than you are afraid of it."
Bill Cosby
 :thumbs:
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