Lockdown vs non-lockdown DPN: the test that decides everything
In plain English
Whether your DPN can be wiped without full payment comes down to when the company lodged — not when it paid. BAS lodged within 3 months of the due date = non-lockdown: four ways out within 21 days. BAS more than 3 months late, or an SGC statement lodged even one day after its due date = lockdown: only payment clears it. Many notices are a mix of both. Work out which parts of yours are which before deciding anything else.
The 21 days run regardless of type
Lockdown or non-lockdown, the clock started when the ATO posted the notice. For non-lockdown amounts, the four remission options expire at day 21. For lockdown amounts the 21 days only delay enforcement — but knowing that changes which conversations you have this week.
The decisive test: lodgment date, not payment date
People assume the penalty depends on how big the debt is or how old it is. It doesn't. The lockdown test looks at one thing: did the company report the debt to the ATO on time (or close to it)?
- If the debt was reported within the allowed window, the ATO knew about it — so the law leaves the door open to remit the director's penalty if the company deals with the debt properly within 21 days. That's a non-lockdown penalty.
- If the debt was reported late or never, the law treats the director as having hidden the position — and locks the penalty onto them personally. That's a lockdown penalty. No insolvency appointment removes it. Only payment does.
Note what's absent from that test: whether you could afford to pay, whether your accountant was slow, whether the ATO took years to issue the notice. None of that changes the classification.
The rules, debt type by debt type
| Debt type | Non-lockdown if… | Lockdown if… |
|---|---|---|
| PAYG withholding | The BAS/IAS reporting it was lodged within 3 months of its due date | Lodged more than 3 months after the due date, or never lodged (including ATO estimates) |
| Net GST (incl. LCT/WET) | The BAS was lodged within 3 months of its due date | Lodged more than 3 months late, or never (including ATO estimates) |
| Super (SGC) | The SGC statement was lodged by its due date — no grace period at all | The SGC statement was lodged any time after its due date, or never |
The super rule catches people constantly. For PAYGW and GST there's a 3-month buffer after the lodgment due date. For SGC there is none: an SGC statement lodged a day late locks that quarter down. And because SGC statements are only required once super wasn't paid on time, most real-world SGC amounts on DPNs are already lockdown by the time anyone looks.
Where nothing was lodged at all, the ATO can estimate the liability and issue a DPN on the estimate — treated as never reported, so lockdown. Disputing the estimate doesn't pause the 21 days.
Mixed notices: most DPNs aren't one or the other
A single DPN usually covers several periods, and each amount is classified separately. A typical notice might show:
- Three BAS quarters lodged on time but unpaid — non-lockdown
- One BAS quarter lodged five months late — lockdown
- Two quarters of SGC, statements lodged after the due date — lockdown
This matters because a remission action within 21 days — say, appointing a small business restructuring practitioner — wipes your personal liability for the non-lockdown amounts only. The lockdown slice stays personal no matter what. Getting the split right tells you what you're actually negotiating over.
Not sure which DPN you're holding?
A specialist can usually classify your notice from your lodgment history in one call — free, confidential, no judgement.
What each classification means for your options
| Non-lockdown amounts | Lockdown amounts | |
|---|---|---|
| Within 21 days | Full payment, voluntary administration, SBR appointment or liquidation remits the penalty | Nothing remits it — the 21 days only delay ATO enforcement against you |
| Payment plan | Defers enforcement, does not remit — see DPNs and payment plans | Same — but here a plan can be a sensible way to pay a debt that's personal anyway |
| After 21 days | Penalty is personal; insolvency options may still make commercial sense but no longer remit | Unchanged — it was always going to be payment |
Worked examples
Example 1 — clean non-lockdown. A cafe company lodged every BAS on time through a rough year but couldn't pay $180,000 of PAYGW and GST. The director receives a DPN. Because everything was lodged on time, the whole notice is non-lockdown: if within 21 days the company pays, or appoints an administrator, SBR practitioner or liquidator, the director's personal liability is remitted. With a viable business under $1m in liabilities, SBR is the option most worth examining first.
Example 2 — the late BAS. A builder's company lodged its December BAS in June — five and a half months late — showing $60,000 owing, and its March BAS on time showing $40,000. The DPN is mixed: $60,000 lockdown, $40,000 non-lockdown. Liquidating within 21 days would remove the $40,000 from the director personally, but the $60,000 follows the director out of the liquidation.
Example 3 — the one-day-late SGC statement. A company missed a quarter's super, then lodged the SGC statement one day after its due date. That amount is lockdown — the 3-month grace applies to BAS, never to super. The director's realistic conversation is about how to pay: instalments, interest remission on the broader account, and protecting personal assets while paying.
How to check your lodgment history today
- Pull the lodgment dates. Your accountant or ATO Online Services can show the due date and actual lodgment date for every BAS and SGC statement on the notice.
- Classify each amount using the table above. The notice itself also states the basis for each amount — but verify it; the classification is worth checking, not assuming.
- Total the two buckets. "I'm personally exposed to $60k regardless, and can still save $40k if I act this week" is a decision you can actually make. Next step: the 21-day decision framework.
Frequently asked questions
How do I tell which type of DPN I have?
The notice states the basis for each amount, but the reliable check is lodgment history: compare each BAS's lodgment date to its due date (3-month buffer), and each SGC statement's lodgment date to its due date (no buffer). Anything estimated by the ATO because nothing was lodged is lockdown.
My accountant lodged late without telling me. Is it still lockdown?
Yes. The test is when the company lodged, not why. "I relied on my accountant" is generally not a defence to a director penalty. You may have a separate complaint against the agent, but it doesn't change the DPN classification.
Is there really no grace period for super?
None. A BAS gets a 3-month buffer after its due date; an SGC statement must be lodged by its due date or the amount is locked down. This is the single most common nasty surprise in DPN classification.
If my notice is all lockdown, is there any point acting within the 21 days?
The penalty can't be remitted, but the 21 days are still when the ATO holds off recovery — useful time to negotiate payment terms, check whether estimated amounts can be corrected by lodging actual figures, and get advice on protecting your position. Doing nothing just means enforcement starts at day 22.
Can lodging outstanding BAS now convert lockdown to non-lockdown?
Only if the BAS is still within 3 months of its due date. Lodging a BAS that's already more than 3 months overdue doesn't restore non-lockdown status — but it can still replace an inflated ATO estimate with the real figure, and it stops future periods locking down. If you have unlodged periods and no DPN yet, lodging now is usually the best protective step available.
Are new directors treated differently?
A new director gets 30 days after appointment before becoming liable for the company's existing unpaid PAYGW, GST and SGC — and resigning within those 30 days doesn't avoid it. The lockdown/non-lockdown classification of those amounts still depends on when the company lodged.
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