How long does an ATO garnishee last?

One-off versus continuing notices

Every garnishee notice says on its face which kind it is. The difference decides how long the pain lasts.

One-off bank notices are the most common. Employer notices are usually continuing, because the ATO wants a slice of each pay rather than a single balance. A continuing wage garnishee typically takes up to 30 cents in each dollar of net pay until the debt is gone.

What actually ends a continuing garnishee

A continuing notice stops for one of four reasons:

• The debt is paid. The third party keeps paying until the amount on the notice is cleared. Remember that general interest charge is still accruing at 11.43% a year, so the finish line moves unless interest is remitted.
• The ATO withdraws it. This is the usual outcome once a suitable payment plan is in place and lodgements are current. You need to ask; it does not happen automatically. See whether a payment plan stops a garnishee.
• The ATO varies it. The ATO may reduce the percentage or the amount if the notice is causing hardship, for example if it leaves you unable to pay rent or wages.
• The debt changes. If the assessment is amended or the debt is disputed and reduced, the ATO should adjust the notice to match.

There is no rule that a notice expires after a set number of months, and there is no statute of limitations on tax debt in Australia, so waiting it out is not a strategy.

A one-off notice can be followed by another

People sometimes breathe out after a one-off notice takes a lump from the account, assuming the ATO has had its turn. It has not. A one-off notice deals with one balance on one day. If the debt remains and nothing else changes, the ATO can issue a fresh notice to the same bank, a different bank, your employer or your customers. It can also move from a one-off to a continuing notice.

The pattern the ATO is watching for is engagement. Overdue lodgements brought up to date, a payment plan that is kept, and a phone call before the next due date all reduce the chance of a repeat. Silence and a new bank account do the opposite, because the ATO can see accounts held in your name and will simply serve the new bank. If the debt is too large for a plan you can keep, the rescue options page walks through the formal alternatives.

What to do next

1. Read your copy of the notice, or ask the bank or employer, to find out whether it is one-off or continuing.
2. Bring lodgements up to date and call the ATO on 13 11 42 to propose a payment plan and ask for the notice to be withdrawn or varied.
3. If the notice is causing hardship, tell the ATO specifically what it is stopping you from paying and ask for a variation while you sort out a plan.

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