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Facing financial difficulty and debt: If you are having difficulties meeting your obligations

Your options during financial difficulty

The best way to make your tax payments is to plan ahead for them so you can pay the full amount on time. See our calendars and important dates to help with your planning

Options for payment

There are a range of options available for paying amounts due.

  • You can pay in full.
  • You can make an instalment arrangement where you repay an agreed amount over time.
  • We can write off an agreed amount if we determine that full payment would cause you serious hardship.
  • A combination of an instalment arrangement and a serious hardship write-off.

If you are unable to pay the full amount due on time, you should contact us as soon as possible. You do not have to wait until the due date for payment has passed. You can phone us on 0800 227 771 or, if you are in business or have a student loan, on 0800 377 771.

We may need further information from you to determine the best options for you. We will discuss your current circumstances and help you determine the best option for dealing with the amount due. We will look at your current situation, your payment history and your ability to meet future obligations using established guidelines.

If your current expenses are higher than the average expenditure of similar households, we will explore and discuss your options with you.

Find out what the average household expenditure is in your region

Penalties and interest may apply

Penalties and interest apply to tax bills that are unpaid by the due date. If your financial situation prevents you from paying on time, please contact us and make an instalment arrangement before the due date. As long as you meet all your obligations under the arrangement you will only be charged one late payment penalty of 1%.

No further penalties will be charged. If this is your first late payment in a two-year period, you will not use your grace period.

Note that even with an arrangement you are still charged interest on the tax owing. So you may wish to consider borrowing money from elsewhere so that you can pay the tax bill by the due date.

If the due date has passed and you have an unpaid tax bill

If you make an arrangement after the due date, any penalties already charged will stand. If you meet all of your obligations under the arrangement, no further penalties will be charged. However, use-of-money interest continues to be charged.

Late payment penalties while we're discussing your options

We may need further information from you to determine the best option for you. During this time, we will not apply further late payment penalties or take new debt recovery actions. We will only recommence late payment penalties and recovery actions if a conclusion is not reached before the end of the negotiated timeframe. We will continue to charge use-of-money interest during the period of negotiation.

For more information please read our Debt options information sheet (IR592) or part 6 of our Debt options booklet (IR582).

Student loan borrowers

From 7 February 2013, you can no longer borrow through the Student Loan Scheme if you have $500 or more in default at the time of your application, and even some portion of the amount has been overdue for a year or more. This applies to all new student loan applications received on or after 7 February 2013 and includes all unpaid repayment obligations, late payment interest, penalties, and amounts under instalment arrangement, regardless of whether you've had a loan before.

Find out your options if you're having difficulty making repayments

Child support customers

The best way to avoid debt is to pay the full amount you owe, on time, every month. But if you get behind in your payments or think you are going to have trouble paying on time, phone us on 0800 221 221.

We will talk to you about ways to pay off your debt. The quickest way to clear the debt is to pay the total amount in one sum. Other options are to pay a partial amount of the total, or to pay off the debt over time by entering into an arrangement with us. We will help you to work out what's possible for you.

We can write off paying parents' penalties in some situations but cannot write off unpaid assessed amounts.

If you have received too much child support and need to pay it back call us on 0800 221 221 to discuss your situation. We may be able to write off the debt in some cases.

 


Date published: 18 Jun 2013

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