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TaxDebtResolution
Free · ATO

ATO Serious Hardship Screener

Answer a few questions about your debt, budget and assets. We apply the tests the ATO uses for release from tax debts on serious hardship grounds and flag anything that rules it out.

In short: What is release from a tax debt?

The ATO can partly or fully release an individual from certain tax debts if paying would cause serious hardship. Released amounts don't have to be paid.

Last reviewed against 2 official sources.

Try an example:

Who owes, and what

Income, costs and assets

Household figures

Other factors

Release likelihood (our screen)

high

Monthly surplus -$100 · assets don't cover the debt

The ATO decides each application on its facts and isn't bound to release even where hardship exists. Interest keeps accruing while it decides. If release doesn't fit, ask about a payment plan.

The ATO's three tests

  1. Income and outgoings: can you meet the debt from your income in a reasonable time after necessities?
  2. Assets and liabilities: do you have assets beyond normal possessions that could pay it?
  3. Other factors: is the hardship short term, your compliance history, whether you paid others first, and vulnerability such as family violence or serious illness.

Worked example

Jo owes A$22,000 of income tax. Her household brings in A$3,200 a month but essentials cost A$3,300, she has A$1,500 in other assets and is recovering from a serious illness. With no surplus, assets far short of the debt and a vulnerability factor, the screen rates release as high: worth applying, though the ATO decides.

Limits

  • The likelihood is our own screen, not an ATO score.

Official sources

Figures last reviewed .

Frequently asked questions

What is release from a tax debt?

The ATO can partly or fully release an individual from certain tax debts if paying would cause serious hardship. Released amounts don't have to be paid.

What counts as serious hardship?

Where paying the tax would leave you without the means to afford basics such as food, clothing, medical supplies, accommodation or reasonable education.

Which debts can be released?

Income tax, PAYG instalments, fringe benefits tax, the Medicare levy, some withholding taxes, and some penalties and interest on those. GST can't be released, and companies can't apply.

Do I have to sell my house?

No. Your home, a car, furniture, household goods, tools of trade and enough cash for day-to-day living are treated as normal possessions. Other real estate, investments and luxury assets are looked at.

What does the ATO need?

All relevant information, up-to-date lodgments, no outstanding amendment requests or disputes, and any insurance or compensation claims finalised. Interest keeps accruing until it decides.

What if I'm refused?

You can object to the decision and then seek review by the Administrative Review Tribunal. You can also reapply if your circumstances change.

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Disclaimer: This tool gives a general estimate based on what you enter and the published rules. It is not tax, legal or financial advice, and the tax authority makes the final decision. Speak to a qualified professional before acting. See our disclaimer.