What is an ATO debt on hold?
Short answer
A debt on hold is a tax debt the ATO has paused collecting because it decided collection was not cost effective at the time. The ATO also calls this non-pursuit. It stops contacting you about the debt, but the debt stays legally payable, any refund or credit you become entitled to is used against it, and the ATO can take it off hold at any time. That is how an old ATO debt reappears.
How a debt ends up on hold
The ATO does not put a debt on hold because you asked, and it is not a hardship measure. It is an internal decision that the cost of chasing a particular debt outweighs what it is likely to recover: the amount is small, the person cannot be located, the business has closed, or the ATO has bigger priorities. The decision creates no new liability. It just changes what the ATO does about an existing one.
For years, a debt on hold was left out of the account balance shown in ATO online services and on statements. Many people had no idea one existed until a tax refund vanished, or a letter arrived in 2025 or 2026 saying the debt was being added back. Our page on what uneconomical to pursue means covers the wording you may see.
What on hold does and does not mean
| On hold means | On hold does not mean |
|---|---|
| The ATO has stopped calling and writing about it | The debt has been forgiven, waived or written off |
| GIC is remitted while it sits outside your balance | Interest can never apply to it again |
| No garnishee, no court action for now | You are safe from collection if your situation changes |
| The amount may not show in your balance | Your tax refund is safe: refunds and credits are still offset against it by law |
The difference between on hold and the formal ways a debt can actually end is explained in our page on release, waiver, write off and non-pursuit.
Letter about a debt on hold?
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What is changing in 2025 and 2026
From August 2025 the ATO has been progressively including debts placed on hold from 1 January 2017 onwards in account balances. The main points:
- If the debt is $100 or more, you get a letter before it is added. Debts under $100 are added without a letter.
- GIC stays remitted for 6 months from the day the debt is included. After that, interest at the normal rate (currently 11.43% p.a.) applies unless you ask for further remission.
- If you already have a payment plan, the ATO says it will contact you before including the debt, and you get time to deal with the new amount.
- The ATO has a dedicated line for debts on hold: 1800 305 499.
Debts placed on hold before 1 January 2017 are treated differently. The ATO paused all collection and refund offsets on those in February 2024. The government then announced a law change to give the Commissioner discretion not to offset refunds against pre-2017 debts owed by individuals, small businesses and not-for-profits. Until that passes, the ATO is not adding those debts to balances and is not offsetting against them, but it has not written them off.
How to see a debt on hold
In ATO online services, go to Tax, then Accounts, then Summary, open the account, and filter transactions from 01/01/2000 sorted oldest to newest. Look for a transaction described as non-pursuit, which marks the day the debt went on hold, and one described as re-raise of non-pursuit or existing debt on hold included in account balance, which marks the day it came back. Businesses use Accounts and payments in Online services for business. Our step-by-step page on how to check what you owe has more.
What to do next
- Search your account transactions for non-pursuit to find whether a debt on hold exists, which period it belongs to, and the date it was put on hold.
- If you have received a letter saying the debt is being included, diarise the date: your 6 months of remitted interest runs from the day it was added.
- Decide whether the debt is right before you pay, and if it is, use the interest-free window to set up a payment plan or ask for further GIC remission.
Related questions
Can I ask the ATO to put my debt on hold?
Not in this sense. Non-pursuit is an ATO decision about whether collecting is worthwhile, not something you apply for. What you can ask for is a payment plan, a deferral of the due date, or release from the debt on serious hardship grounds if you are an individual with income tax debt. Those are separate processes with their own rules.
Why did my refund get taken for a debt I could not see in my balance?
Because offsetting applies to debts on hold even when they are not shown in the balance. The law requires the ATO to apply refunds and credits to any outstanding debt, and a debt on hold is still outstanding. The offset will appear as a transaction on the account the debt belongs to.
Letter about a debt on hold?
Free, confidential help understanding the debt and your options before the interest restarts.
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