We may ask you to make a deduction from your employee's or subcontractor's salary or wage.
Why we ask you to make deductions
Salary or wage deductions are one of the ways we:
- recover overpayments
- ensure a debt is repaid, or
- make sure a court ordered payment is made
We will issue you with a garnishee notice to ask you to make deductions from your employee or subcontractor’s salary or wage.
When we talk about a garnishee notice, we are referring to a document issued by an appropriate government agency to a third party, such as an employer or a financial institution, to recover a debt.
We only do this when your employee or subcontractor hasn’t made a reasonable attempt to repay their debt, or has not kept a previous repayment arrangement.
What garnishee notices contain
The notice will include:
- the relevant section of the Act the notice is issued under
- identification details of your employee or subcontractor and the amount owing
- the amount to be deducted and the date repayments are to start
- available methods of repayment
- privacy information
Before we issue the notice we will contact you and your employee or subcontractor to discuss the debt and deductions.
We will confirm by phone or in writing:
- the identity of your employee or subcontractor
- employment status
- employee reference number or payroll number
- gross wage and pay frequency - for example, weekly, fortnightly, or monthly
- whether your employee or subcontractor has requested a voluntary deduction
- how you prefer to make the deductions and how often they are made
- your business details and who you nominate to receive the garnishee notice
If your business is a partnership, such as a legal or accounting firm, the notice will be addressed to the legal business name, not the trading name. The notice will be addressed to one of the partners, making that partner responsible by law.
If your employee or subcontractor has more than one deduction on their salary or wage you must action all notices received.
A garnishee notice from a particular creditor does not have priority over another. If you receive more than one notice, both notices have the same priority.
Tell us if circumstances change
You must tell us if your employee or subcontractor’s employment conditions change or if they are no longer employed by you. This may affect the garnishee notice.
Your employee's obligation
It is the responsibility of your employee or subcontractor to contact all creditors to negotiate a reasonable outcome for all parties.
If you have been issued with a garnishee notice you have a legal obligation to implement it.
Failure to action a notice will result in the debt being transferred to you.
You may be liable to repay either:
- a portion of the garnishee amount, or
- the amount of debt owing at the time the garnishee notice was sent
If you have not responded to a notice or have missed a deduction we will contact you to discuss your reasons for non-compliance. If we are unable to contact you after 2 attempts, or if you refuse to comply with your obligations, the matter may be referred for legal action.
We have a legal obligation to take appropriate action to recover social security overpayments in accordance with:
- sections 1230, 1230C, 1233 of the Social Security Act 1991
- sections 80, 89 of the Family Assistance (Administration) Act 1999
- section 184, 186 of the Paid Parental Leave Act 2010, or
- section 42 of the Student Assistance Act 1973
What you need to provide
You must provide your employee or subcontractor with a copy of the garnishee notice. The notice must include:
- your business or company name
- the name of your employee or subcontractor
- the written or stamped words staff in confidence on the envelope
You must send the first deduction to us either 14 days after the date you have received the garnishee notice or 7 days after you pay your employee or subcontractor.
The notice will ask you to tell us when you expect the deductions to start and the payment frequency you have chosen.
After you have sent the first deduction you can choose to send further deductions on a weekly, fortnightly or monthly basis.
The garnishee notice will have all the information you need. There are a number of repayment methods to choose from.
How we can help
We can provide assistance to help you make deductions from your employee or subcontractor salary or wage. If you need assistance regarding a particular notice, please phone the number on the garnishee notice.
If you have a more general enquiry, the Contact Centre can assist you.