A garnishee order is a legal avenue pursued by a Creditor who has exhausted all other credible methods of recovering a debt. Garnishees orders bypass the debtor and are issued directly to a Garnishee, a third party that provides the debtor with funds for various reasons.

In simple terms, a Garnishee Order legally requires a third party (Garnishee) to direct funds from your debtor’s salary, bank accounts or his outstanding debtors to pay what he owes you.

The Garnishee can be the debtor’s bank, Employer, Tenant, Client, Trade Debtors, or any other institution holding money for the debtor.

The two main types of garnishee orders issued in Australia are:

1. Garnishee orders issued to employers for wages or salary;
2. Garnishee orders for debts issued to people or institutions that handle the debtor’s money such as banks, tenants and others.

Garnishee Notices sent to Employers

Garnishee Orders sent to Employers require for the Employer to deduct a certain amount or percentage from their Employee's pay.

Employer's Process and Obligation

Services Australia will contact both the Employer and Employee prior to issuing the  Garnishee Notice to discuss the debt and deductions and confirm the following:

• the identity of the Employee or Subcontractor;
• their employment status;
• their employee reference number or payroll number;
• the gross wage and pay frequency;
• whether the Employee or Subcontractor has requested a voluntary deduction

Once the above information is gathered a Garnishee notice is issued and sent to the Employer.

The Garnishee Notice

The Notice includes the following details:

• 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.

Sample of a Garnishee Notice in NSW

Garnishee Notices by State

The most significant differences in the enforcement of Garnishee Orders from one State to another are related to each State’s financial safeguards for its residents. Each State sets conditions on the amount of money a garnishee can redirect from a debtor’s funds so that the debtor can continue to meet his minimum living expenses while the debt is being settled.

Garnishee Orders for Salary Deductions in New South Wales 
In New South Wales, the Creditor is only required to send a copy of the garnishee order to the garnishee and not to the debtor. 

• The garnishee is obligated to leave the debtor with a minimum amount of funds for living expenses. This amount is indexed every year and it is detailed on the Garnishee Notice.
• The garnishee’s administrations expenses are deducted from the money owed to you and are capped at a maximum of $13.00.
• The debtor can apply for the debt to be paid in instalments.

Garnishee Orders for Salary Deductions in Queensland 
In QLD a debt is referred to as a warrant for redirection from financial institutions, while a Garnishee Order for wages or salary is known as a warrant of redirection of earnings.

Creditors in Queensland are required to prove to the Registrar, that the debtor can afford the redirection of funds without experiencing unreasonable hardship.

Additionally, the Creditor is required to provide both the garnishee and debtor with a copy of the enforcement warrant.

• The warrant only comes into force seven days after it has been served to the employer;
• In addition to the warrant, the debtor’s employer is served with Form 79 (Notice to the employer for reduction of earnings) and Form 80 (Notice that debtor is not an employee).

Reference Links

Services Australia - Garnishee notice to employers for deductions from salaries and wages