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  • Administered Programs 1.5 to 1.18

    Purpose

    The ATO contributes to the economic and social wellbeing of Australians through governing a range of programs that result in transfers and benefits back to the community.

    How the ATO measures the performance of the administered programs and the achievement of their purpose are set out in pages 177–187 of the Australian Taxation Office Budget Statements (PDF, 2.08MB)This link will download a file (in the PBS), and pages 23–25 of the ATO corporate plan 2016–17.

    Performance overview

    All deliverables are achieved through making payments to eligible recipients in accordance with relevant laws. In many instances, annual fluctuations in the number and value of benefits are driven by external environmental influences and therefore beyond our span of control.

    We paid $10.8 billion in administered expenses in 2016–17, $148 million (or 1.4%) higher than 2015–16 and $196 million (or 1.8%) less than forecast in the 2016–17 Budget. The largest expense was fuel tax credits with payments of $6.2 billion. This was $18 million (or 0.3%) above the 2016–17 Budget forecast and $149 million higher than the 2015–16 outcome. We paid a total of $91 million in claims under the product stewardship for oil program and the exploration development incentive.1.

    Research and development refundable tax offset claims increased by 2.7% to $2.5 billion over the previous year. Australian screen production incentive claims decreased by $45 million (or 13.9%) to $280 million. The strength last year was due to a small number of large films; however, by their nature, large film tax offset claims are irregular.

    We administered $417 million in expense payments to assist families and individual taxpayers – $44 million higher than 2015–16, but $13 million below the Budget forecast. We supported the superannuation savings of lower income individuals through low income superannuation contributions of $793 million and superannuation co-contribution scheme payments of $148 million. Superannuation guarantee charge entitlements of $281 million were also distributed.

    TABLE 2.20 Administered expenses 2014–15 to 2016–17(10)(11)
      2014–15$m 2015–16$m 2016–17$m
    Energy/fuel schemes payments 
    Fuel tax credits 6,050 6,089 6,238
    Product stewardship for oil program 49 63 72
    Cleaner fuels grants scheme 172 17 1
    Exploration Development Incentive (12) 0 0 19
    Total energy/fuel scheme payments 6,271 6,169 6,330
    Other administered payments
    Education tax refund 4 2 1
    Baby bonus 1 0 0
    Private health insurance rebate 215 247 249
    First home saver account 26 2 0
    National rental affordability 82 122 166
    Tax bonus for working Australians 0 0
    Superannuation co-contribution 169 154 148
    Research and development tax offsets 2,332 2,480 2,546
    Australian Screen Production Incentive (13) 143 325 280
    Low income superannuation contribution 791 788 793
    Interest payments on lost superannuation accounts 3 11 14
    Seafarer tax offset 8 0 12
    Conservation tillage tax offset 28 0
    Total other administered payments 10,075 10,300 10,540
    Distribution of Super Guarantee charge entitlements 372 373 281
    TOTAL(14) 10,448 10,674 10,822
    (10) Totals may differ from the sum of components due to rounding.
    (11) A result greater than zero when not rounded is represented by ‘0’. A nil result is represented by ‘–‘.
    (12) The 2016–17 exploration development incentive amount of $19 million is an estimate, due to difficulties associated with tracing payments to the ultimate beneficiary.
    (13) The 2016–17 film tax offset amount of $280 million is an estimate due to difficulties with data matching.
    (14) The 2016–17 total excludes $170.7 million of interest on overpayments of tax.

    Performance results

    TABLE 2.21 Program 1.5 to 1.18 Administered programs, 2015–16 to 2016–17
    Performance criterion Criterion source (page) Result Target
    PBS Corp plan 2015–16 2016–17 2016–1715
    1.5 Australian Screen Production Incentive  
    Number of tax offsets processed 177 23 206 168 The ATO aims to administer the program in accordance with the law
    Value of tax offsets processed 177 23 $325.2 million $279.7 million
    Number of tax offsets issued compared to the number of tax offset entitlements 177 23 Issued:
    206
    Entitled:
    286
    Issued:
    168
    Entitled:
    220
    Value of tax offsets issued compared to the value of tax offset entitlements 177 23 Issued:
    $325.2 million
    Entitled:
    $388.1 million
    Issued:
    $279.7 million
    Entitled:
    $313.7 million

    Analysis

    Claims under this program vary from year to year. The above numbers and value of offsets indicate a lower level of film activity for this year.

    (15) The 2016–17 results for the film tax offset (number and value) are estimates due to difficulties with data matching.

    TABLE 2.21 Program 1.5 to 1.18 Administered programs, 2015–16 to 2016–17
    Performance criterion Criterion source (page) Result Target
    PBS Corp plan 2015–16 2016–17 2016–17
    1.6 Exploration Development Incentive
    Number of applications made by mining exploration companies 178 23 84 54 The ATO aims to administer the program in accordance with the law
    Value of exploration expenditure sought to be converted into credits before ATO applies statutory cap on total credits 178 23 $70.3 million $45.7 million
    Modulation factor provided by the ATO in sufficient time to allow allocation of capped exploration credits to shareholders 178 23 Yes Yes By 31 December 2016

    Analysis

    The program has been administered in accordance with the law. In addition, the modulation factor was provided by 31 December 2016. This allowed allocation of capped exploration credits to shareholders.

    TABLE 2.21 Program 1.5 to 1.18 Administered programs, 2015–16 to 2016–17
    Performance criterion Criterion source (page) Result Target
    PBS Corp plan 2015–16 2016–17 2016–17
    1.7 Fuel Tax Credits Scheme
    Number of registered participants 178 23 231,591 235,389 The ATO aims to administer the scheme in accordance with the law
    Value of claims 178 23 $6.1 billion $6.2 billion
    Proportion of payments processed within service standard timeframes 178 23 99% 99% 85%

    Analysis

    The program has been administered in accordance with the law. In addition, 99% of payments were processed within service standard timeframes, exceeding the target.

    TABLE 2.21 Program 1.5 to 1.18 Administered programs, 2015–16 to 2016–17
    Performance criterion Criterion source (page) Result Target
    PBS Corp plan 2015–16 2016–17 2016–17
    1.8 National Rental Affordability Scheme
    Number of tax offsets processed 179 23 27,305 27,295 26,000
    Value of tax offsets processed 179 23 $122.0 million $166.2 million $185 million
    Ratio of claims made through the ATO compared to the Department of Social Services(16) 179 23 3:1 (approx.) 3:1 (approx.) 3:1

    Analysis

    The small change in the number of tax offsets processed reflects the maturity of the scheme. In Budget 2016–17, the government announced that it was not proceeding with round five of the scheme.

    The increase in the value of tax offsets processed reflects the cumulative impact of increasing number of dwellings becoming eligible for the incentive, coupled with an update to the methodology in relation to not-for-profit refundable tax offset claimants.

    The ratio remains unchanged from earlier years.

    (16) Estimates as final dwelling numbers will change following participant compliance checks.

    TABLE 2.21 Program 1.5 to 1.18 Administered programs, 2015–16 to 2016–17
    Performance criterion Criterion source (page) Result Target
    PBS Corp plan 2015–16 2016–17 2016–17
    1.9 Product Stewardship for Oil
    Number of claims processed 179 23 530 422 The ATO aims to administer the program in accordance with the law
    Number of participants registered 179 23 41 38
    Value of payments processed 179 23 $62.7 million $71.9 million
    Value of revenue collected 179 23 $29.3 million $33.9 million
    Proportion of payments processed within service standard timeframes 179 23 93% 97% 85%

    Analysis

    The program has been administered in accordance with the law. In addition, 97% of payments were processed within service standard timeframes, an improved result relative to 2015–16.

    Outlays have risen due to increased category 1 claims being lodged due to business expansion and/or increased sales.

    TABLE 2.21 Program 1.5 to 1.18 Administered programs, 2015–16 to 2016–17
    Performance criterion Criterion source (page) Result Target
    PBS Corp plan 2015–16 2016–17 2016–17
    1.10 Research and Development Tax Incentive
    Number of claims processed for 40% non-refundable research and development tax offset claimants 180 24 1,515 1,812 The ATO aims to administer this program in accordance with the law
    Number of claims processed for 45% refundable research and development tax offset claimants 180 24 10,608 11,262
    Value of claims processed for 40% non-refundable research and development tax offset claimants 180 24 $4.3 billion tax offset paid $3.6 billion tax offset paid
    Value of claims processed for 45% refundable research and development tax offset claimants 180 24 $2.5 billion tax offset paid $2.5 billion tax offset paid
    Proportion of offsets processed within service standard timeframes 180 24 33.9% 42.4%

    Analysis

    The program has been administered in accordance with the law.

    Some company income tax returns require data validation and integrity checking in relation to research and development claims. As a result, these returns took longer to finalise. In the second half of 2016–17, a triage role has been included in the process and has led to an improvement in the proportion of offsets processed within service standard timeframes.

    TABLE 2.21 Program 1.5 to 1.18 Administered programs, 2015–16 to 2016–17
    Performance criterion Criterion source (page) Result Target
    PBS Corp plan 2015–16 2016–17 2016–17
    1.11 Low Income Superannuation Contribution
    Number of beneficiaries of entitlements determined 181 24 3.1 million 3.0 million The ATO aims to administer the program in accordance with the law
    Value of entitlements determined 181 24 $798.5 million $770.6 million
    Value of entitlements paid 181 24 $788.0 million $793.5 million
    Proportion of original contributions paid within 60 days 181 24 100% 99.99% 97%

    Analysis

    The program has been administered in accordance with the law. In addition, 99.99% of payments were processed within 60 days, exceeding the target.

    TABLE 2.21 Program 1.5 to 1.18 Administered programs, 2015–16 to 2016–17
    Performance criterion Criterion source (page) Result Target
    PBS Corp plan 2015–16 2016–17 2016–17
    1.12 Private Health Insurance Rebate
    Number of claims processed 181 24 660,087 677,724(17) Approximate number of tax returns with private health insurance details: 8.2 million  
    Value of rebates processed 181 24 $247.5 million $249.2 million
    Proportion of private health insurance rebates claimed through the tax system 181 24 $225.5 million $226.4 million(18)
    Liability imposed on lodging eligible individuals 181 24 $551.8 million $594.4 million(18)

    Analysis

    The total value of claims paid through the tax system has grown only slightly. However, numbers have grown more strongly pushing down the average claim value slightly. This is in line with recent policy changes that slow growth in claim amounts.

    (17) 2015–16 income year returns, processed during 2016–17.
    (18) 2015–16 income year returns, processed to 2 August 2017.

    TABLE 2.21 Program 1.5 to 1.18 Administered programs, 2015–16 to 2016–17
    Performance criterion Criterion source (page) Result Target
    PBS Corp plan 2015–16 2016–17 2016–17
    1.13 Superannuation Co-contribution Scheme
    Number of beneficiaries of entitlements determined 181 24 488,037 451,137 The ATO aims to administer the scheme in accordance with the law
    Value of entitlements – determined 181 24 $153.8 million $142.8 million
    The ATO aims to administer the scheme in accordance with the law – paid 181 24 $154.2 million distributed contribution $147.8 million distributed
    Proportion of original co-contributions paid within 60 days 181 24 98.8% 98.5% 97%

    Analysis

    The program has been administered in accordance with the law. In addition, 98.5% of payments were processed within 60 days, exceeding the target.

    TABLE 2.21 Program 1.5 to 1.18 Administered programs, 2015–16 to 2016–17
    Performance criterion Criterion source (page) Result Target
    PBS Corp plan 2015–16 2016–17 2016–17
    1.14 Superannuation Guarantee Scheme
    Number of superannuation guarantee complaints leading to a superannuation liability being raised 182 24 10,761 5,598 The ATO aims to administer the scheme in accordance with the law
    Number of superannuation guarantee complaints leading to no result 182 24 4,120 7,060
    Number of employees who have had superannuation guarantee entitlements raised as a result of ATO compliance activities 182 24 94,963 69,705
    Number of employees who have had superannuation guarantee entitlements raised as a result of voluntary disclosures 182 24 111,518 77,344
    Number of employees whose records are checked 182 24 18,614 16,874
    Number leading to a superannuation liability being raised 182 24 10,380(19) 7,700
    Proportion of employers for whom superannuation guarantee liabilities were raised by the ATO 183 24 1.5% 0.9%
    Value of superannuation guarantee charge raised (including penalties and interest) 183 24 $670.4 million $603.5 million(20) $702.0 million
    Value of superannuation guarantee charge collected 183 24 $341.3 million $282.9 million(20) $376.0 million (annually)
    PBS: $381.0m
    Value of superannuation guarantee entitlements distributed to individuals or superannuation funds 183 24 $373.3 million $281.1 million(20) $380.0 million
    Value of superannuation guarantee debt on hand 183 24 $1.36 billion $1.5 billion $1.3 billion
    Value of superannuation guarantee amount of superannuation guarantee debt irrecoverable at law or uneconomical to pursue 183 24 $124.4 million not pursued $167.0 million $219 million written off

    Analysis

    Positive trends were observed in a number of 2016–17 results relative to 2015–16.

    The overall number of superannuation guarantee complaints received from employees increased by approximately 25% on 2015–16.

    As a result, we placed a greater emphasis on allowing employers to self-correct and pay directly to the correct super fund (with interest) rather than lodging a superannuation guarantee charge (SGC) statement. The value of superannuation guarantee self-corrected via payment direct to the employee’s fund was $106 million in 2016–17. This approach had an impact on reported results with respect to superannuation guarantee liabilities being raised (as instances of self-correction are not reported as liabilities raised in the results), collected and distributed to individuals or superannuation funds.

    While the overall number of superannuation guarantee complaints received increased, the total number of superannuation guarantee complaints that resulted in an audit case declined by around 14% relative to 2015–16 while the number of employers whose records where checked also declined by around 9%.

    The proportion of employees with super guarantee entitlements raised through voluntary disclosures is 52.6% compared to 54% in the prior year. Overall, the reported total number of employees who have had super guarantee entitlements raised has declined by 28% compared to the prior year. This result will have been significantly influenced because:

    • the figure for employees who had entitlements raised as a result of compliance activities does not include those where the employer paid direct to fund (and therefore is significantly lower than reported in 2015–16)
    • our emphasis on self-correction (publicised on our website) resulted in less voluntary SGC statements lodged (employers who would otherwise have made a voluntary disclosure paid direct to fund rather than lodging an SGC statement and paying via the ATO).

    The growth in debt on hand for super guarantee charges results from the cases being pursued having a lower likelihood of recovery and lower write-off rates than in recent years.

    (19) This result was not reported in 2015–16.
    (20) Including $106 million of self-corrected payments into each of these three criteria would result in all of them meeting their performance target.

    TABLE 2.21 Program 1.5 to 1.18 Administered programs, 2015–16 to 2016–17
    Performance criterion Criterion source (page) Result Target
    PBS Corp plan 2015–16 2016–17 2016–17
    1.15 Targeted assistance through the taxation system
    Number of interest payments processed 183 25 347,146 232,440 The ATO aims to administer the scheme in accordance with the law
    Value of interest payments processed 183 25 $10.8 million $14.2 million
    Proportion of unclaimed superannuation accounts where interest is paid to the account owner compared to total accounts transferred 183 25 100% 100%

    Analysis

    The program has been administered in accordance with the law.

    TABLE 2.21 Program 1.5 to 1.18 Administered programs, 2015–16 to 2016–17
    Performance criterion Criterion source (page) Result Target
    PBS Corp plan 2015–16 2016–17 2016–17
    1.16 Interest on overpayment and early payments of tax
    Number of clients entitled to credit interest due to processing performance 184 25 650,879 196,339 The ATO aims to administer the scheme in accordance with the law
    Value of credit interest applied to client accounts due to processing performance 184 25 $51.9 million $29.8 million
    Proportion of credit interest paid due to processing performance compared to all credit interest paid 184 25 28.4% 33.7%

    Analysis

    The program has been administered in accordance with the law.

    The reduction in both the number and value of credit interest payments is driven by improved delivery processes and the introduction of automated credit interest processing.

    TABLE 2.21 Program 1.5 to 1.18 Administered programs, 2015–16 to 2016–17
    Performance criterion Criterion source (page) Result Target
    PBS Corp plan 2015–16 2016–17 2016–17
    1.17 Bad and doubtful debts
    Provision for bad and doubtful debts as a proportion of total tax receivables 184 25 36% 36% Below 35%

    Analysis

    The value of bad and doubtful debts and remission has remained steady from 2015–16 to 2016–17. Total receivables and bad and doubtful debts have displayed similar trends across the year.

    Increased focus on audit activity of large multinationals, an increase in the number of smaller value debts, and entities entering insolvency have all contributed to the small rise. The ATO has continued to consider cost effective outcomes to resolving disputes via settlement action where possible.

    TABLE 2.21 Program 1.5 to 1.18 Administered programs, 2015–16 to 2016–17
    Performance criterion Criterion source (page) Result Target
    PBS Corp plan 2015–16 2016–17 2016–17
    1.18 Other administered – Cleaner Fuels Grant Scheme
    Number of claims processed 185 25 33 6 The ATO aims to administer the scheme in accordance with the law
    Number of participants registered 185 25 32 32
    Value of payments processed 185 25 $17.3 million $0.9 million
    Proportion of payments processed within service standard timeframes 186 25 45% 100% 85%

    Analysis

    The program has been administered in accordance with the law. In addition, all 2016–17 claims were processed within the service standard timeframes.

    Although this scheme closed from 1 July 2015, existing clients had until 30 June 2016 to lodge claims and up to 30 June 2017 to make amendments. A small number of residual claims were amended within this period during 2016–17.

    TABLE 2.21 Program 1.5 to 1.18 Administered programs, 2015–16 to 2016–17
    Performance criterion Criterion source (page) Result Target
    PBS Corp plan 2015–16 2016–17 2016–17
    1.18 Other administered – Seafarer Tax Offset
    Number of tax offsets processed 186 25 0 Less than 5 The ATO aims to administer the scheme in accordance with the law
    Value of tax offsets processed 186 25 $0 million $12.2 million
    Survey all taxpayers who are eligible to claim the seafarers tax offset 186 25 100% 100%

    Analysis

    The program has been administered in accordance with the law. In addition, 100% of surveyed taxpayers who were eligible to claim the seafarers tax offset understood their eligibility.

    TABLE 2.21 Program 1.5 to 1.18 Administered programs, 2015–16 to 2016–17
    Performance criterion Criterion source (page) Result Target
    PBS Corp plan 2015–16 2016–17 2016–17
    1.18 Other administered – First Home Saver Accounts Scheme
    Proportion of government contributions paid to eligible account holders within 60 days 187 25 92.6% 92.1% 92%
    Number of government contributions paid 187 25 2,832 817 The ATO aims to administer the scheme in accordance with the law
    Value of government contributions paid 187 25 $1.8 million $0.48 million
    Value of account balances 187 25 $0.1 million $0.0 million

    Analysis

    The program has been administered in accordance with the law. In addition, the proportion of government contributions processed within 60 days exceeded the performance target.

    The First Home Saver Accounts scheme ended on the 30 June 2015, with only residual payments for eligible clients being made since. This has led to the significant reduction in the number and value of government contributions, along with the value of account balances, in 2016–17 relative to 2015–16.

    In 2016–17, a targeted approach was applied to proactively make payments to identified clients where possible. Payments will continue to be made until December 2017 when the system will be turned off.

      Last modified: 30 Oct 2017QC 53771