IRD & Tax Debt
The Inland Revenue Department (IRD) has broader powers than a standard debt collector. However, you still have rights and protections against Serious Hardship.
✂️ Wage Garnishing
If you haven't paid your tax, IRD can issue a Deduction Notice to your employer. They don't need a court order to do this.
IRD generally cannot take more than **20% of your gross pay** per payday.
🌱 Hardship Relief
Under the Serious Hardship criteria, IRD can choose to write off part or all of your tax debt if paying it would mean you cannot meet essential living expenses.
This includes food, medical costs, child support, and basic housing.
Understanding IRD's Power
Unlike private creditors, IRD can access information about your income directly from employers and banks. They are also prioritized in bankruptcies and company liquidations.
1. Recovery Agents
IRD sometimes uses private debt collection agencies to find people. However, these agencies must follow the same **Fair Trading Act** rules as any other collector. They cannot use IRD's statutory powers themselves.
2. Payment Plans
You have a right to propose an **Installment Arrangement**. If you communicate proactively, IRD is often willing to waive late payment penalties if you stick to a plan.
Student Loans
IRD also manages student loan repayments. If you move overseas, your interest-free status ends and you must make fixed repayments based on your loan balance twice a year.