Review into the Australian Taxation Office’s use of Garnishee Notices
We reject the legal status quo which enables garnishee orders issued prior to bankruptcy to continue to
garnish the wages of bankrupted individuals post-bankruptcy. As we understand it, garnishee orders issued by the ATO are considered to be a statutory charge, and therefore will continue to operate post-bankruptcy if issued prior to bankruptcy.
We have read and considered the common law basis for this legal position as
articulated in the Commissioner of Taxation v Donnelly2 and Macquarie Health Corporation Ltd v FCT3.
We also reject the legal status quo that permits the ATO to issue garnishee orders in exercise of its
administrative powers, absent a court hearing, pursuant to subsection 260-5(2) of Schedule 1 to the Taxation Administration Act 1953 (Cth) (TAA).
We further reject the inflated limit for ATO garnishee orders which is 30% of income, compared with 20% for the private sector.
Read our full submission here [PDF]190621 Submission IGT Garnishee Review