Draft ATO Vulnerability Framework

Submission Date: 5 August 2025

The Law Council of Australia provided a submission to comment on the Australian Taxation Office (ATO) draft Vulnerability Framework (the Framework). The Framework has an important role to play in positioning the ATO to better deal with vulnerable taxpayers in its operations when administering the nation’s tax and transfer systems.

The Law Council considers that the Framework articulates commendable values, such as empathy, fairness and inclusion, which are paramount when working with vulnerable people. However, as set out in this submission, the Framework could provide more practical detail to guide both internal decision-makers and external users. The Law Council is concerned that, without practical details and language, the Framework’s useability and accessibility are reduced and may leave vulnerable taxpayers uncertain about their options.

A key point made in this submission is the lack of meaningful recognition in the Framework that the ATO can take action to alleviate some of the effects of financial abuse using existing powers. Further, the Framework does not recognise that there should be an attempt to do so in every case where financial abuse is identified. The Framework’s current focus on what the ATO cannot do (as opposed to what it can do—and, perhaps, ought to do), should be revisited. On that point, as noted throughout this submission, the Tax Ombudsman has recently recommended the Commissioner explore existing powers and seek legislative change.¹ In the Law Council's view, the draft Framework fails to address this recommendation.

Further, the Law Council submits that the Framework’s explanation of vulnerability may be too general and does not provide accessible guidance to taxpayers, practitioners or ATO staff. While the Law Council agrees that it is appropriate to avoid rigid definitions to ensure decision-makers have enough practical flexibility to apply the Framework in an ever-changing environment, the current draft risks being too ambiguous and non-specific without a non-exhaustive list of common vulnerability scenarios to guide users.

Overall, the Law Council suggests the Framework would benefit from moving beyond aspirational language to become a practical tool for all users. Ideally, the Framework should be a tool that is straightforward, transparent and actionable. It should clearly define the ATO’s commitments, provide examples to guide consistent application, and embed mechanisms for accountability. Vulnerable taxpayers, and the practitioners and advocates who support them, need a system that is principled in intent and reliable in practice. A clearer, more direct Framework is essential to achieving this aim.

The Law Council’s BLS, in particular its Taxation Committee and SME Business Law Committee would welcome the opportunity to be further consulted on the codesign of the Framework and its implementation—perhaps as part of an ongoing Stakeholder Reference Group for this multi-year ATO journey. The Law Council encourages the ATO to consult our experts and broader community representatives, in the interests of achieving the desired cultural change initiatives to improve how the ATO deals with vulnerable people’s tax-related and transfer-related obligations.

^{1 Tax Ombudsman, Identification and management of financial abuse within the tax system (April 2025).}

Last Updated on 19/08/2025

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