Garnishee of continuing income to recover debts 107-05050010

Recovery of debt must be quick and efficient without causing financial hardship to customers. Recovery arrangements include:

• full cash payments
• recovery by instalments
• withholdings, and
• garnishee action

Staff must:

• review a customer's record carefully before applying a garnishee, and
• contact the customer to make sure that applying the garnishee is appropriate

A customer may prefer to organise a payment in full rather than be subject to a garnishee notice.

Before garnishee action can be taken, staff must try to negotiate payment by all available voluntary methods. Garnishee action can occur if the customer:

• does not respond to contact by letter or phone
• failed to enter into a reasonable arrangement
• had arrangement/s they did not keep
• failed to disclose details about their true capacity to repay

Where a customer refuses to enter into a payment arrangement, garnishee action can proceed without any further contact. If the customer retracts their refusal statement, agree on a payment arrangement if garnishee has not already applied.

Note: use of tax refunds to repay an outstanding Centrelink debt can occur even if the customer has a current garnishee or payment arrangement.

Do not garnishee Child Support payments.

Customers may have more than one garnishee on their continuing income (for example, a Child Support garnishee and a Centrelink garnishee). No garnishee takes precedence over others.

There is no protected earnings amount for Centrelink garnishees (except Child Support payments). A customer's financial situation should always be taken into consideration.

Address the garnishee notice to the legal business/company name, not the trading name. Locate the company's legal name via the 'ABN Lookup' link on the Resources page.

Find out if the customer has another name or recorded alias before actioning a garnishee. If the employer knows the customer by another name the garnishee notice must be issued in the customer's main name as well as the customer's other known name or alias. For example, Judy Resident also known as (AKA) Judy Citizen. Only include aliases on a garnishee notice when the employer advises they do not know the customer by their main name on the customer record.

The use of email to send and receive garnishee correspondence is not our preferred contact method. However if the use of email is required this should be through PGP secure webmail.

When issuing a garnishee notice, carefully consider the appropriate pay start date:

• the date must be no earlier than 15 days after the notice is issued
• if sending the notice via post, you must allow an additional 8 calendar days for potential postage delays
• the auto populated start date may need to be manually altered due to script limitations

If issuing a garnishee to partnerships, such as legal or accounting firms, address the notice to one partner. This makes that partner responsible in law. Address the garnishee to the legal business/company name rather than any trading name. Stamp 'Staff-in-Confidence' on the envelope of all wage garnishee notices. Where the notice is marked for attention of a person or position, this name is to be after the business/company name.

Where a customer is a sole trader in a business, the business is not a separate legal entity. Hence, money owed to the business is money owed to the customer. Money due to the sole trader business can be subject to garnishee action.

All requests for information from an employer must be in writing. Staff should use the Q609 letter to request information from an employer. Do not obtain information regarding the customer's employment status or gross wage over the phone.

Employment details are often located through Single Touch Payroll (STP) data matches and Tax Declaration Form (TDF) debtor matching reviews. Advise the customer of any data matches before taking administrative action or checking the information with a third party. See Single Touch Payroll debt recovery data match or Tax Declaration Form (TDF) Debtor matching reviews.

Non-current customers with debt(s) without a payment arrangement may have Interest Charges (IC) applied. Interest Charges only apply to customers aware of their debt. Customers can avoid interest charges by:

• paying the debt in full, or
• entering into an acceptable payment arrangement, and:
• paying an instalment within 28 days from the date of the notice, and
• continually making repayments under an existing payment arrangement

Interest continues accruing until the employer remits the first payment and the arrangement status changes to CURrent. Consider accrued interest after garnishee implementation for IC exclusion.