When life delivers more than one blow, the tax system doesn’t always feel like it’s on your side. But sometimes, it can be — if you know how to ask.
A Story Too Many Australians Don’t Know –
How ATO Hardship Provisions Work –
“ATO hardship provisions”
Australian Taxation Office (ATO) does have hardship provisions, but they’re not automatic.
Under s 340-5 of the Taxation Administration Act 1953, you may apply for release from certain debts if paying would leave you unable to afford basic living expenses such as housing, medical care, or transport.
The Commissioner assesses each case individually — and evidence is everything.
Evidence Needed for ATO Hardship Provisions
To strengthen an application for release or reduction of debt, you’ll need to provide:
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Full financial disclosure — income, expenses, assets, liabilities.
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Medical evidence — reports from specialists and treatment timelines.
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A clear timeline — connecting divorce, deception, illness, and discovery of the debt.
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Evidence of your spouse’s role — bank mandates, bookkeeping records, or communications.
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Demonstrated hardship — budgets proving repayment would remove basic living essentials.
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Good faith — proof you have always intended to meet obligations, but circumstances made it impossible.
How to Frame Your ATO Hardship Provisions Application
The ATO responds not only to numbers but to the human story those numbers tell. To give yourself the best chance:
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Tell your story clearly — show the lived reality, not just the spreadsheets.
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Link hardship to the debt — explain how relationship breakdown, illness, and financial collapse caused the problem.
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Be transparent — the ATO will cross-check everything.
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Offer what you can — even a modest repayment may demonstrate goodwill.
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Plan for the future — show how your circumstances will improve.
Final Thoughts on ATO Hardship Provisions
Hardship provisions exist to ensure fairness in the tax system, but they require a well-prepared, evidence-backed application.
For those facing the triple blow of divorce, illness, and unexpected tax debt, remember: you’re not just a tax file number. You’re a person with a story that deserves to be heard.
If you need guidance, seek legal advice. A barrister experienced in tax disputes with the ATO can help frame your application, present evidence, and improve your chances of relief.