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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.

    Performance overview

    All deliverables are achieved through making payments to eligible recipients in accordance with relevant laws.

    We paid $11.4 billion in administered payments in 2017–18, $583 million (or 5.1%) higher than 2016–17 and $188 million (or 1.7%) more than forecast in the 2017–18 Budget. The largest expense was fuel tax credits with payments of $6.8 billion. This was $524 million (or 8.3%) above the 2017–18 Budget forecast and $575 million higher than the 2016–17 outcome.

    TABLE 2.11 Administered payments 2015–16 to 2017–18(a)

    Payments

    2015–16
    $m

    2016–17
    $m

    2017–18
    $m

    Energy/fuel schemes payments

    Fuel tax credits

    6,089

    6,238

    6,814

    Product stewardship for oil program

    63

    72

    75

    Cleaner fuels grants scheme

    17

    1

    0

    Exploration Development Incentive(b

    0

    19

    4

    Total energy/fuel scheme payments

    6,169

    6,330

    6,892

    Other administered payments

    Education tax refund

    2

    1

    0

    Private health insurance rebate

    247

    249

    249

    First home saver account

    2

    0

    0

    National rental affordability

    122

    166

    188

    Superannuation co-contribution

    154

    148

    126

    Research and development tax offsets

    2,480

    2,546

    2,463

    Australian Screen Production Incentive(c

    325

    280

    282

    Low income superannuation contribution

    788

    793

    779

    Interest payments on lost superannuation accounts

    11

    14

    15

    Seafarer tax offset

    0

    12

    9

    Total other administered payments

    10,300

    10,540

    11,003

    Distribution of super guarantee charge entitlements

    373

    281

    402

    TOTAL(d)

    10,674

    10,822

    11,405

    NOTES
    (a) Totals may differ from the sum of components due to rounding.
    (
    b) The 2017–18 exploration development incentive amount of $4 million is an estimate, due to difficulties associated with tracing payments to the ultimate beneficiary.
    (c) The 2017–18 Australian Screen Production Incentive of $282 million is an estimate due to difficulties with data matching.
    (
    d) The 2017–18 total excludes $105 million of interest on overpayments of tax.

    Performance results

    The way the ATO measures the performance of administered programs and the achievement of their purpose is set out on pages 204–219 of the Australian Taxation Office Budget Statements (in the Treasury Portfolio Budget Statement), and pages 25–26 of the ATO corporate plan 2017–18.

    TABLE 2.12 Programs 1.5 to 1.13 and 1.15 to 1.18 Administered programs performance

    Performance criterion

    Source

    Results

    Target

    2015–16(a)

    2016–17

    2017–18

    2017–18

    1.5 Australian Screen Production Incentive: Value of tax offsets processed

    PBS 204
    Corp plan 26

    $325.2 million

    $279.7 million

    $281.8 million

    Administer the program in accordance with the law

    1.6 Exploration Development Incentive: Modulation factor provided by the ATO in sufficient time to allow allocation of capped exploration credits to shareholders

    PBS 205
    Corp plan 25

    Yes

    Yes

    Yes

    By 31 December 2017

    1.7 Fuel Tax Credits Scheme: Value of claims

    PBS 206
    Corp plan 26

    $6.1 billion

    $6.2 billion

    $6.8 billion

    Administer the scheme in accordance with the law

    1.8 National Rental Affordability Scheme: Value of tax offsets processed

    PBS 207
    Corp plan 26

    $122.0 million

    $166.2 million

    $188.2m

    Administer the program in accordance with the law

    1.9 Product Stewardship for Oil Program: Value of payments processed

    PBS 208
    Corp plan 26

    $62.7 million

    $71.9 million

    $74.9 million

    Administer the program in accordance with the law

    1.9 Product Stewardship for Oil Program: Value of revenue collected

    PBS 208
    Corp plan 26

    $29.3 million

    $33.9 million

    $33.6 million

    Administer the program in accordance with the law

    1.10 Research and Development Tax Incentive: Value of claims processed for 38.5%(b) non-refundable research and development tax offset claimants

    PBS 209
    Corp plan 26

    $4.3 billion tax offset paid

    $3.6 billion tax offset paid

    $2.9 billion tax offset paid

    Administer the program in accordance with the law

    1.10 Research and Development Tax Incentive: Value of claims processed for 43.5%(c) refundable research and development tax offset claimants

    PBS 209
    Corp plan 26

    $2.5 billion tax offset paid

    $2.5 billion tax offset paid

    $2.5 billion tax offset paid

    Administer the program in accordance with the law

    1.11 Low Income Superannuation Tax Offset: Value of entitlements paid

    PBS 210
    Corp plan 26

    $788.0 million

    $793.5 million

    $779.3 million

    Administer the program in accordance with the law

    1.12 Private Health Insurance Rebate: Value of rebates processed

    PBS 211
    Corp plan 26

    $247.5 million

    $249.2 million

    $248.8 million

    Administer the program in accordance with the law

    1.13 Superannuation Co-contribution Scheme: Value of entitlements paid

    PBS 212
    Corp plan 26

    $154.2 million
    distributed
    contribution

    $147.8 million
    distributed

    $125.8 million

    Administer the scheme in accordance with the law

    1.15 Targeted Assistance through the Taxation System: Value of interest payments processed

    PBS 215
    Corp plan 26

    $10.8 million

    $14.2 million

    $14.9 million

    Administer the program in accordance with the law

    1.16 Interest on Overpayments and Early Payments of Tax: Value of credit interest applied to client accounts due to processing performance

    PBS 216
    Corp plan 26

    $51.9 million

    $29.8 million

    $13.0 million

    Administer the program in accordance with the law

    1.17 Bad and Doubtful Debts: Provision for bad and doubtful debts as a proportion of total tax receivables

    PBS 217
    Corp plan 26

    36%

    36%

    35%

    Below 35%

    1.18 Seafarers Tax Offset: All eligible taxpayers are aware of how to claim the offset

    PB: 219
    Corp plan 26

    -

    100%

    100%

    100%

    – = Performance measure was not previously reported in the annual report for the given years.

    NOTES
    (a) There were no targets set in 2015–16.
    (
    b) For 2015–16 and 2016–17 the tax offset percentage was 40% and changed to 38.5% in the 2017–18 PBS.
    (c) For 2015–16 and 2016–17 the tax offset percentage was 45% and changed to 43.5% in the 2017–18 PBS.

    Results analysis

    We use our systems, processes and controls to establish and maintain confidence that the correct level of payments and transfers delivered through the tax and superannuation systems are paid to eligible recipients in accordance with relevant laws, thus meeting our performance target for many of our administered program measures.

    In many instances, small annual fluctuations in the value of benefits arise due to minor changes in economic conditions or the circumstances of our clients. However, there are some programs where a more substantial change in the value of benefits was observed in 2017–18. Further discussion of these cases is provided below.

    Administered program 1.07: Fuel Tax Credits Scheme

    The overall increase in administered payments for 2017–18 is primarily driven by growth in fuel tax credits, which increased by $0.6 billion (or almost 10%) compared to 2016–17. Increased claims were observed across most industry groups but particularly within the mining and transport sectors.

    Administered program 1.08: National Rental Affordability Scheme

    The increase in the value of tax offsets over multiple years processed reflects the cumulative impact of increasing number of dwellings becoming eligible for the incentive, with the 2017–18 value of offsets ($188.2 million) representing a 54% increase on 2015–16 ($122.0 million).

    Administered program 1.16: Interest on overpayments and early payments of tax

    The value of credit interest paid in 2017–18 equates to 13.2% of the total interest paid, compared to 33.7% from 2016–17.

    The number of clients receiving credit interest increased to 566,816 this year, an increase of 189% on 2016–17 (196,339). The value of credit interest paid substantially decreased to $13.0 million, a decrease of 56% on 2016–17 ($29.8 million).

    The reduction in the value of credit interest payments is being driven by processing an increased volume of credit interest entitlements in a significantly shorter timeframe, resulting in a reduced financial entitlement as end-to-end processing is completed more efficiently.

    TABLE 2.13 Program 1.14 Superannuation Guarantee Scheme

    Performance criterion

    Source

    Results

    Target

    2015–16(a

    2016–17

    2017–18

    2017–18

    Number of superannuation guarantee complaints leading to a superannuation liability being raised

    PBS 213
    Corp plan 26

    10,761

    5,598

    13,441

    Administer the scheme in accordance with the law

    Number of superannuation guarantee complaints leading to no result

    PBS 213
    Corp plan 26

    4,120

    7,060

    5,472

    Administer the scheme in accordance with the law

    Number of employees who have had superannuation guarantee entitlements raised as a result of ATO compliance activities

    PBS 213
    Corp plan 26

    94,963

    69,705

    237,945

    Administer the scheme in accordance with the law

    Number of employees who have had superannuation guarantee entitlements raised as a result of voluntary disclosures

    PBS 213
    Corp plan 26

    111,518

    77,344

    77,785

    Administer the scheme in accordance with the law

    Number of employers whose records are checked

    PBS 213
    Corp plan 26

    18,614

    16,874

    24,106

    Administer the scheme in accordance with the law

    Number leading to a superannuation liability being raised

    PBS 213
    Corp plan 26

    10,380

    7,700

    16,416

    Administer the scheme in accordance with the law

    Proportion of employers for whom superannuation guarantee liabilities were raised by the ATO

    PBS 213
    Corp plan 26

    1.5%

    0.9%

    1.8%

    Administer the scheme in accordance with the law

    Value of superannuation guarantee charge raised (including penalties and interest)

    PBS 214
    Corp plan 25

    $670.4 million

    $603.5 million

    $1,107.2 million

    $613 million

    Value of superannuation guarantee charge collected

    PBS 214
    Corp plan 25

    $341.3 million

    $282.9 million

    $440.9 million

    $315 million

    Value of superannuation guarantee entitlements distributed to individuals or superannuation funds

    PBS 214
    Corp plan 25

    $373.3 million

    $281.1 million

    $401.6 million

    $329 million

    Value of superannuation guarantee debt on hand

    PBS 214
    Corp plan 25

    $1.36 billion

    $1.5 billion

    $1.9 billion

    $1.7 billion

    Value of superannuation guarantee debt irrecoverable at law or uneconomical to pursue

    PBS 214
    Corp plan 25

    $124.4 million not pursued

    $167.0 million

    $238.8 million

    $118 million

    NOTE
    (
    a) There were no targets set in 2015–16.

    Results analysis

    Positive trends were observed in a number of 2017–18 results relative to 2016–17, particularly with respect to superannuation guarantee funds collected and distributed to individuals and super funds.

    The 2017–18 superannuation guarantee scheme performance results are primarily driven by three factors:

    • an increase of over 6,000 in total cases resulting from a super guarantee complaint
    • an increase in cases initiated by the ATO
    • the cessation of allowing employers to self-correct and make payments directly to a super fund when they had identified a super guarantee shortfall.

    Collectively, these factors have led to significant growth in the number of cases where a liability was raised; the number (and proportion) of employers for whom a liability was raised; the number of employees who had entitlements raised for them; the value of liabilities raised, collected and distributed to individuals and super funds; and the value of super guarantee debt on hand.

      Last modified: 26 Oct 2018QC 57106