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Businesses voluntarily opting out of JobKeeper for fear of the ATO

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
07 July 2020 2 minute readShare

With the ATO signalling a tough approach to JobKeeper compliance activity, some businesses are choosing to voluntarily drop out of the scheme for fear of financial reprisal or due to moral reasons, despite there being no regulatory requirement for them to do so.

MyBusiness has learnt that businesses across Australia that have seen revenue recovery in June are choosing to voluntarily pull out of the JobKeeper scheme, mostly to avoid any assumed compliance issues down the track.

The Institute of Public Accountants general manager of technical policy Tony Greco told MyBusiness that some entities have in fact decided to opt out of JobKeeper as their conditions have improved to a point that they morally find it difficult to continue receiving government support, despite being entitled to do so.  

However, one of the design features of the government’s $1,500 fortnightly wage subsidy is that once an entity satisfies the decline in turnover test, it does not need to retest its turnover in later periods.

This means that a business that complied with the JobKeeper eligibility criteria in earlier months will continue to receive the $1,500 per fortnight wage subsidy for the remainder of the JobKeeper period, until 27 September.

“This is one of the generous features of Jobkeeper,” Mr Greco said.

“If you suffered a decline in either actual turnover or projected turnover based on your best guesstimate, even if you are wrong, compared to the same prior year period, you are locked into receiving Jobkeeper till September.

“The only provision is you continue to make the required monthly declarations. That’s it.”

At the onset of the government stimulus payment, Deborah Jenkins, Deputy Commissioner from the ATO, confirmed in a webcast hosted by MyBusiness that businesses only have to prove their eligibility once.

“Once you are eligible, you remain eligible for the period until September,” Ms Jenkins said at the time.

However, while there is no requirement for businesses to pull out based on the current rules, Mr Greco has cautioned that this may change if the government decides to tweak the eligibility criteria as part of its upcoming review.

“Take the case of a surgeon who projected his/her turnover to have fallen off a cliff when a ban on elective surgery was put in place in early April,” Mr Greco said.

“By the end of the same month, the ban was removed, effectively returning their practice to business as usual.”

He revealed that the IPA supports re-testing of decline in turnover so that JobKeeper can remain targeted to those in need.

“Other countries have also reviewed eligibility criteria now that the worst-case scenarios have not eventuated. New Zealand, for example. We do not support wholesale changes to JobKeeper other than to address some anomalies that have since surfaced as this would erode confidence,” Mr Greco stressed.

Earlier this week, the ATO confirmed that 3,000 ATO officers are taking a closer look at JobKeeper applicants and picking out the ineligible or fraudulent applications.

To date, the ATO has refused more than 6,500 applications for JobKeeper due to either ineligibility or fraudulent behaviour, but more businesses can expect to see their payments suspended moving forward.

Mr Greco has advised anyone that thinks they might have done the wrong thing to ring up the ATO and admit their mistake.

Businesses voluntarily opting out of JobKeeper for fear of the ATO
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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