Document ID: chunk:federal_register_of_legislation:C2025C00130:section:95:p1
Version: federal_register_of_legislation:C2025C00130
Segment Type: section
Provision Reference: s 95 (pt 1/2)
Character Range: 386690–389289

95  Secretary may write off debt
 (1) The Secretary may, on behalf of the Commonwealth, decide to write off a debt for a stated period or otherwise, but only if subsection (2), (4A) or (4B) applies.

Secretary may write off debt if debt irrecoverable or debt will not be repaid etc.
 (2) The Secretary may decide to write off a debt under subsection (1) if:
 (a) the debt is irrecoverable at law; or
 (b) the debtor has no capacity to repay the debt; or
 (c) the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
 (d) it is not cost effective for the Commonwealth to take action to recover the debt.
 (3) For the purposes of paragraph (2)(a), a debt is taken to be irrecoverable at law if, and only if:
 (b) there is no proof of the debt capable of sustaining legal proceedings for its recovery; or
 (c) the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or
 (d) the debtor has died leaving no estate or insufficient funds in the debtor's estate to repay the debt.
 (4) For the purposes of paragraph (2)(b), if a debt is recoverable by means of:
 (a) deductions under section 84; or
 (aa) deductions under section 1231 of the Social Security Act 1991; or
 (b) setting off under section 84A family assistance; or
 (c) application of an income tax refund under section 87; or
 (d) setting off under section 87A against a payment referred to in paragraph 82(1)(c) (child care service payments);
the person is taken to have a capacity to repay the debt unless recovery by those means would cause the person severe financial hardship.

Secretary may write off subsection 28(2) or (6) debt if claimant and partner separate
 (4A) The Secretary may, under subsection (1), decide to write off a debt arising because of subsection 28(2) or (6) (which deal with when income tax returns have not been lodged) if the following conditions are met:
 (a) the claimant and the partner mentioned in subparagraph 28(1)(b)(iii) (the ex‑partner) ceased to be members of the same couple after the end of the income year after the cancellation income year mentioned in subsection 28(1);
 (b) if the claimant was required to lodge an income tax return for the cancellation income year—an assessment is or has been made under the Income Tax Assessment Act 1936 of the claimant's taxable income for the cancellation income year;
 (c) in any case—the ex‑partner was required to lodge an income tax return for the cancellation income year but still had not done so by the time when the claimant