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Centrelink Debt taken from Tax Return 2017

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Hi,

 

I've recently received a letter from Centrelink stating that the 'debt' that is outstanding with them is going to be deducted from my tax return.

 

However, I have raised a dispute with Centrelink on two seperate occasions, 6-months apart, for this same 'debt' and in both cases, they have advised that they will be getting in contact with me. However, despite updating my mailing address and never having changed any of my contact information, Centrelink have never made any effort to contact me with the exception of this new letter stating that the debt will be deducted from my tax return.

 

I have several questions in this regard:

1. How can Centrelink legally request that an amount that is in dispute be deducted from my Tax return?

2. What facilities are in place for me to dispute this deduction with the ATO (because the matter is still in-dispute with Centrelink), to ensure the amount is NOT taken from my tax return until which time that an outcome of the dispute has been reached?

3. What process do I need to follow in order to have this amount refunded to me once the evidence of the disputed debt is found to be unsubstantiated?

 

If the ATO is working in collaboration with Centrelink in order to recover these amounts, then the above facilities should be available to the public and well noted. It has been stated in a previous post (https://community.ato.gov.au/t5/General-tax-questions/Centrelink-debt/td-p/853) that the ATO must 'legally' use my Tax refund in order to recover any 'debt' owing to Centrelink, however it also states that we are to approach Centrelink directly in order to address any concerns.

 

Upon approaching Centrelink in regards to recovering any money owed to me as part of a Tax return, they have directed me to the ATO. If the ATO have a legal requirement to recover a debt owing to the Department of Human Services, then you must have facilities available for communication between your two departments in regards to a disputed debt.

 

Can you please provide me a solution to have this disputed amount investigated properly and the money owing to me for the period of 2016-2017 payed to me as required?

 

Thanks.

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ATO Certified Response

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Hello Petlles,

If you have a debt with Centrelink, any tax refund you are entitled to will be swept over from the ATO to Centrelink. The process is automated, and the dispute will still rest with Centrelink.

You could ask for an extension of time to lodge your return so that you can resolve your issue with Centrelink prior to lodging your return. Otherwise, the money is treated by Centrelink as if you have made a payment directly to them, and the ATO is no longer involved.

If you have a dispute with Centrelink that you cannot resolve you do have review rights, and you can take your issue to the Administrative Reviews Tribunal. You could also lodge a complaint. There is also a Commonwealth Ombudsmen that receives Centrelink complaints if you are still having trouble resolving your issue.
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Community Support

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Hi @Pettles,

 

 

Welcome to our Community! We're checking our response with a specialist area, and we hope to get back to you in the next couple of days.

Thanks for your patience, JodieH.

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Most helpful response

ATO Certified Response

Newbie

Replies 0

Hello Petlles,

If you have a debt with Centrelink, any tax refund you are entitled to will be swept over from the ATO to Centrelink. The process is automated, and the dispute will still rest with Centrelink.

You could ask for an extension of time to lodge your return so that you can resolve your issue with Centrelink prior to lodging your return. Otherwise, the money is treated by Centrelink as if you have made a payment directly to them, and the ATO is no longer involved.

If you have a dispute with Centrelink that you cannot resolve you do have review rights, and you can take your issue to the Administrative Reviews Tribunal. You could also lodge a complaint. There is also a Commonwealth Ombudsmen that receives Centrelink complaints if you are still having trouble resolving your issue.