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ATO will not claw back ‘honest’ JobKeeper mistakes

ATO will not claw back ‘honest’ JobKeeper mistakes

The ATO will not seek to recover JobKeeper payments from employers who made an honest mistake, a parliamentary inquiry has heard.

Fronting a COVID-19 parliamentary committee, ATO second commissioner Jeremy Hirschhorn said that while the Tax Office had written to 8,000 businesses to inform them that JobKeeper payments would cease because of eligibility issues, it had not sought to reclaim all of the payments so far.

Mr Hirschhorn noted that payments to these businesses were made in the first month or two of operation of the wage subsidy program, with the value of payments under $100 million.

“Where it is an honest mistake, we are just turning off Jobkeeper for future months, we are not seeking to claw back the JobKeeper that they have received,” Mr Hirschhorn said.

“We had asked money back from some, but I think the concern in the community was more the fear that we would claw it back, whereas the actuality of most of these eligibility cases is that they were viewed as honest mistakes and we have not sought to claw back.

“There are different reasons — there is the eligibility and honest mistake element and there are bits where we identify multiple claims for the one employee, and that’s where money will come back, potentially.”

Mr Hirschhorn also acknowledged that these letters were sent to new businesses or start-ups that did not satisfy the eligibility criteria — an issue that has been raised extensively by the professional accounting and tax bodies because of the inequitable outcome based on an entity’s reporting cycle.

Of the 8,000 businesses that received the ATO letter, 3,800 did not respond, Mr Hirschhorn added.

“Our general stance is… there are certain mistakes you can make like classic eligibility mistakes where we would categorise as honest mistakes because the law is complex particularly for newly formed businesses — that’s where a lot of the angst is around newly formed businesses,” Mr Hirschhorn said.

Redesigning the application process for JobKeeper 2.0

Mr Hirschhorn also told the committee that the ATO would now look to include more eligibility checks into the application process to ensure that entities applying for JobKeeper 2.0 would not face such letters from the ATO down the track.

“People will have to reapply, so we will have to design a new application process asking for the relevant information, and with a bit more time this time around, we will be able to build more features into the application form,” he said.

“Can we design this into the application process so we don’t get a situation where somebody applies, gets money, and then we say ‘you don’t look eligible to us’ — we’re going to design as much as possible into the application process.”

Source: AccountantsDaily

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