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Major Centrelink tax time warning: 'You owe us'

Services Australia has revealed it might pinch money from your tax return if you have outstanding debts.

Stewart Perrie
·Senior Journalist
·2-min read
Centrelink sign next to person holding wad of $20 notes
Services Australia has revealed it might pinch money from your tax return if you have 'outstanding' debts to pay. (Source: AAP/Getty)

Aussies waiting for their tax returns to come in have been warned the dollar amount could be slightly lower than expected. Services Australia revealed it has a system in place that allows it to dip into that cash boost if you have "outstanding" debts to pay.

The body in charge of Centrelink sent out a PSA this week as businesses hit the July 14 deadline to submit Single Touch Payroll finalisation declarations, which is the full report of an employee's pay for the financial year. Services Australia said money from your tax return could be taken before it lands in your account.

"Sometimes we’ll use your tax refund to reduce the amount you owe us, even if you have a repayment arrangement in place," it wrote.

"Legally, we have to recover money that’s owed to us. Understanding how we recover debts at tax time can help you plan ahead and minimise financial impacts."

Services Australia warned the outstanding debts it usually chases are related to:

  • The Family Tax Benefit (FTB) or Child Care Subsidy (CCS)

  • If you’re a former customer and you’re not making any repayments on your debt

  • You have an overdue Child Support debt

Aussies have to pay any existing debts or return overpayments before Centrelink will give them any top-ups, supplements or lump sums.

Do you have a story? Email stew.perrie@yahooinc.com

"This can include existing debts for income support payments," Services Australia said.

"We’ll only ever use your CCS to recover any CCS overpayments or existing childcare debt amounts. This includes using any top-ups, arrears or your current CCS payment.

"If you still have a debt after available supplements or top-ups have been paid, we can use your tax refund to recover the outstanding amount."

It added that if owing money for overdue Child Support causes you financial hardship then you can call the Child Support enquiry line before you lodge your tax return.

But Services Australia revealed it won't recover money from your tax refund (or your Family Tax Benefit top-ups, supplements or lump sums) if your debt repayments are "paused due to a disaster or emergency event or a pending formal review".

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