Why Some JobKeeper Recipients Might Owe the ATO

Australia’s tax office has warned that some JobKeeper recipients might have to give back the payments if they’re found to be ineligible.

The Australian Tax Office (ATO) has emailed 8,000 small businesses and sole traders, according to a report by the Guardian.

The email indicated these businesses and sole traders were targeted because they had only begun operating after 1 January, 2020 or had no income information for the 2018-19 financial year. Therefore they could not prove they had faced a 30 per cent reduction in revenue.

The ATO said the recipients had 14 days to respond to the agency or face a suspension of payments and further investigation.

“If we don’t hear anything within 14 days we will advise you that the entity will not receive further payments under this entitlement,” the email read, as seen by The Age and The Sydney Morning Herald.

“If you have made an honest mistake you may not have to repay amounts you have already received.”

According to the ABC, JobKeeper payments have totalled nearly $13 billion and have reached 3.3 million employees across 872,482 businesses. It also confirmed the ATO had rejected more than 6,500 applications that were found to be ineligible or fraudulent.

The JobKeeper scheme was announced on 30 March and gave businesses affected by the coronavirus pandemic payments to support staff on their payroll. If eligible, businesses and sole traders would receive $1,500 a fortnight for each eligible worker had they faced a 30 per cent drop in income due to coronavirus.

Other criteria included:

• their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month), or
• their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month), and
• the business is not subject to the Major Bank Levy
• The employer must have been in an employment relationship with eligible employees as at 1 March 2020, and confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments.
• Not-for-profit entities (including charities) and self-employed individuals (businesses without employees) that meet the turnover tests that apply for businesses are eligible to apply for JobKeeper Payments.

Outside of businesses, delivery and rideshare drivers could also receive the payments as long as your records showed the 30 per cent decline in jobs.

The scheme is expected to last until September unless an extension is granted by the federal government.