[Deep Red]

Can anyone tell me if there is a minimum wage level where garnishing cannot take affect? or what is the formula they use to determine the percentage? / This is for NSW.

[Cliff]

Hi and Welcome,

Assuming that it is a child support issue, then there is a ‘protected earnings amount’ which you have to be left with each week:

Protected Earnings

Employers should not deduct the full specified periodic deduction from a payer's salary or wages if that would leave the employee with less than the 'protected earnings amount' (section 46(4)).

The protected earnings rate is defined as the amount prescribed by regulation (section 4(1)). The weekly rate is prescribed as 75% of the maximum fortnightly basic rate of Newstart Allowance payable on 1 January each year, to a person who is over 21 and partnered, and has no dependent children (regulation 3). The protected earnings rate is used to calculate the amount of the deductions for salary or wage payments made in each respective calendar year (regulation 3). The protected earnings amount for recent years is:

Year Amount
2008 $290.85 per week
2009 $304.05 per week

The amount of salary and wages is the amount payable after the deduction of income tax deductions (section 46(8)).

Example

In March 2008 F earns $350 a week and pays tax of $26.00 a week. F's employer is required to deduct child support of $50 a week. F is paid after-tax wages of $324 a week. The protected earnings rate at 1 January 2008 is $290.85. To deduct $50 in child support would leave F with less than the protected earnings rate. For that week F's employer can only deduct $33.15 ($324 less $290.85).

This is from http://www.csa.gov.au/guidev2/TheGuideMaster.aspx?content=5_2_4

[Deep Red]

Thank you for that reply, it was very informative, however in this case it isn't child support, it is a situation with a bank trying to claim money owed on a credit card, also there are outstanding monies for the Tax Dept. ( long story: -marriage break up - Health issues - loss of job- however starting a new job in two weeks at a minimal wage. $49,500 plus super) Once everyone knows where i am then i can only imagine a Garnishing order will follow.

[Cliff]

Hi,

For credit card debt and tax debt I don't think there is a set amount that can be deducted. At the end of the day, if it goes to court then the court will decide on the amount to be deducted according to an individuals circumstances.

No one wants debt to get to that situation and you end up with court costs and debt collection fees being added onto what you already owe.

Here is a story from the NSW Consumer credit legal centre http://www.cclcnsw.org.au/content/view/64/61/

Nick's story

Nick had been having trouble paying his credit card debt. At first, the bank was ringing him all the time but then he heard nothing for a while and thought the debt had been written off. A year after he had stopped paying Nick was contacted by a debt collector. The debt collector said he had to pay the whole debt within the next week or he would be taken to court. The debt collector told Nick that they could take his car, his stereo or anything else of value. Nick is now too scared to open the door in case someone will come in and take his things!

Have you considered working out what your day to day living expenses are and then how much you could reasonably afford to pay a month to pay and suggesting that to your creditors?

You can't pay what you don’t have – so my advice would be to pay what you can afford on a regular basis. Don’t over estimate the amount you can pay a month/week – it's far better to be realistic and pay a lower amount and be reliable, than miss payments.

These website links are factsheets from NSW Consumer credit legal centre outlining what to do if you owe money:

Problems with your Loan: Can't pay your loan? http://www.cclcnsw.org.au/content/view/50/61/
Making an application to pay by instalments http://www.cclcnsw.org.au/content/view/68/61/
Enforcement of Debts in the Local Court http://www.cclcnsw.org.au/content/view/65/61/

[Deep Red]

Hi Cliff,

That information was exactly what i was after, i appreciate your time you took to help me out.
I now know where i stand. much appreciated.

[jimjams]

Deep Red, I've been where you are now. Believe me, there is light at the end of the tunnel. Keep your pecker up, get yourself through this difficult time, and it'll come good in the end. :)

[fran]

Here's the link to the NSW dispute resolution the URL has changed to:

dispute resolution NSW (http://www.cclcnsw.org.au/fact-sheets/problems-with-your-loan/have-a-dispute-you-cant-resolve-with-your-credit-provider-or-broker/)

"EDR is a service for resolving disputes between consumers and members of the EDR Scheme. EDR is funded by the members of the EDR Scheme (lenders and brokers). EDR is the main way to resolve a dispute and is much better than going to Court because:

1. It is free for consumers;

2. It is independent (despite being funded by industry);

3. All enforcement action stops (including Court proceedings) while EDR considers your dispute;

4. A decision will (usually) be made by the EDR Scheme if the parties cannot negotiate a solution. The decision is binding on the EDR member if you accept the decision. If you don’t accept the decision you can still go to Court (subject to any time limits);

5. EDR Schemes can decide on repayment arrangements due to financial hardship under the Credit Law;

6. Disputes can be lodged in EDR before and after court proceedings have been issued but usually not after Court judgment."