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Australia Help with Paying the ATO Guide

getting help with paying the ATO. The guide covers: the payment plans and the instalment arrangements (the "help with the tax debt") — the taxpayer who cannot pay the full tax debt by the due date can apply for the "payment plan" (the "instalment arrangement") through the ATO online services (the "myGov" or the "Business Portal"); the online payment plan can be set up automatically for the debt up to $100,000; the payment plan requires: (a) the "minimum monthly payment" (the "amount based on the debt size and the taxpayer's capacity to pay"), (b) the "regular payments" (the "weekly, the fortnightly or the monthly"), (c) the "GIC" accruing on the unpaid balance at the rate of 11.54% per annum; the taxpayer can apply for the "tailored payment plan" for the debt above $100,000 by contacting the ATO directly (the "ATO debt line at 13 11 42"); the financial hardship support (the "serious hardship relief") — the taxpayer experiencing the "serious financial hardship" (the "inability to meet the reasonable living expenses" — the "food, the rent, the medical expenses, the utilities") can apply for: (a) the "deferral of the payment" (the "postponement of the due date for the up to 12 months"), (b) the "remission of the GIC" (the "cancellation of the interest charges"), (c) the "release from the tax debt" (the "full or the partial waiver of the debt" — the "rare and the exceptional" relief under the "Commissioner's discretion"); the hardship application must include: (a) the "statement of the financial position" (the "assets, the income, the expenses"), (b) the "evidence of the hardship" (the "medical certificate, the termination letter, the eviction notice"), (c) the "proposed repayment plan"; the support for the businesses and the not-for-profits (the "business debt relief") — the business experiencing the "short-term cash flow difficulties" can apply for: (a) the "deferral of the BAS and the PAYG payments" (the "up to 6 months deferral"), (b) the "payment arrangement for the superannuation guarantee charge", (c) the "release from the tax debt for the insolvent business" (the "debt waiver in the liquidation or the bankruptcy").

Support for the Natural Disasters and the Crises

  • Natural disaster support: The ATO provides the "tailored support" for the taxpayers affected by the "natural disasters" (the "bushfire, the flood, the cyclone, the storm, the drought"). The support includes: (a) the "automatic deferral of the lodgement and the payment deadlines", (b) the "waiver of the GIC and the penalties", (c) the "fast-tracked refund processing" and (d) the "access to the superannuation" for the disaster-affected individuals.
  • Personal crisis support: The taxpayer experiencing the "personal crisis" (the "domestic violence, the serious illness, the death in the family, the mental health condition") can access the "ATO vulnerability support". The taxpayer can call the "ATO hardship line at 13 11 42" and ask for the "vulnerability support officer". The officer can defer the payments, waive the penalties and refer the taxpayer to the "financial counselling services".
  • COVID-19 tax support (legacy): The ATO provided the "COVID-19 tax support" during the pandemic period, including the "deferral of the BAS and the tax payments", the "waiver of the GIC" and the "cash flow boost". The legacy COVID-19 support arrangements have now ended. The taxpayers still repaying the COVID-19 deferred amounts can continue the payment plans.

For the financial difficulties and the disaster support, see our Bankruptcy & Insolvency Guide →.

Debt Relief and Waivers

  • Release from the tax debt: The "Commissioner's discretion" allows the ATO to release the taxpayer from the tax debt in the "exceptional circumstances". The release is the "rare" remedy — the taxpayer must demonstrate: (a) the "serious financial hardship" (the "assets cannot cover the debt and the living expenses"), (b) the "no reasonable prospect of the payment" (the "terminal illness, the permanent disability, the bankruptcy without the assets"), (c) the "public interest" consideration.
  • Lump sum payment arrangement: The taxpayer who receives the "lump sum payment" (the "inheritance, the compensation payment, the insurance payout") may be required to make the accelerated payment towards the tax debt. The taxpayer can negotiate the "lump sum settlement" (the "reduced payment to settle the debt" — the "rare" occurrence in the specific circumstances).
  • Bankruptcy and the tax debt: The individual who enters the "bankruptcy" (the "formal bankruptcy under the Bankruptcy Act 1966") can include the tax debt in the bankruptcy. The ATO is the "unsecured creditor" in the bankruptcy. The tax debt is released at the "discharge from the bankruptcy" (the "3 years and 1 day from the filing of the statement of the affairs").

For the interest and the penalties charged on the unpaid tax, see our Interest & Penalties Guide →.