Individuals Stewardship Group key messages 24 July 2020

Government Stimulus measures update

JobKeeper extension

Earlier this week the government announced proposed changes to the JobKeeper Payment program, extending the program through to 28 March 2021. A JobKeeper extension fact sheet is available on the Treasury website.

These proposed changes will not impact JobKeeper payments until after 28 September 2020. Once legislation has passed, the ATO will let members know and provide additional information on the ATO website. Enrolments for JobKeeper payment remain open until the end of the program.

As at 16 July, the ATO had delivered $30 billion in JobKeeper payments to 960,000 businesses which covers about 3.5 million employees.

Early release of superannuation

Application for early release of super can now be claimed up to 31 December 2020, extended from 24 September 2020.

As of 7 July 2020, around 2.5 million individuals had been approved for early release of super, across one or both financial years, totalling $28.1 billion.

Cash flow boost payments

Business that received initial cash flow boost payments, will automatically receive additional cash flow boosts when they lodge their activity statements from June to September 2020. As at 16 July, more than $16 billion in credits had been applied to 750,000 businesses under the Cash flow boost measure.

The ATO has created a Cash Flow Boost estimator that illustrates how the payment may be distributed between activity statement periods.

Instant asset write-off

The instant asset write-off threshold has been extended until 31 December 2020 for businesses with an aggregated turnover of less than $500 million for eligible assets that cost less than $150,000 each.

Working from home guidance

The 'shortcut' method (80 cents per hour) introduced for COVID-19 for 1 March to 30 June, has been extended to 30 September 2020.

Tax treatment of state and territory government grants and payments for COVID-19

The ATO is progressively publishing guidance on ato.gov.au on the tax treatment of state and territory government grants and payments provided in response to COVID-19. This will include electricity rebates, payments to support business, payroll tax relief, land tax relief and rent relief. The ATO will send a link out to members when the information is finalised.

Debt and lodgment translation support

Support is available through a dedicated line for debt and lodgment queries (13 11 42), emergency support (1800 806 218), the Translating and Interpreting Service (13 14 50), and National Relay Service call numbersExternal Link.

Tax Time 2020 update

Tax Time 2020

Due to these unprecedented times the ATO were anticipating that at Tax Time:

• many taxpayers will be dealing with a range of financial and other circumstances they have not faced before
• many taxpayers expecting a refund will want to access it earlier
• there would be a surge in demand for the second phase of early release of super.

The ATO took steps to meet the anticipated increase in demand, which included:

• increased staffing
• accelerated training
• cross-training existing non-frontline staff from across the ATO
• developing a rolling strategy to meet demand surges and shifting channel needs
• extending the service window to provide evening and weekend access to our phone service.

In addition to the call centre preparation, the ATO has:

• expanded its communications, including the Tax Time Essentials 2020 webpage
• developed a number of Tax Time Toolkits covering industries and occupations
• managed increased volume of prefill data including welfare payments and JobKeeper payments
• introduced the working from home simplified claiming method
• expanded automatic refund of franking credits

As a result, the ATO has been well placed to manage the volume of calls received and the processing of lodgments.

The ATO’s compliance approach to the stimulus measures is based on the following principles:

• First priority is to provide help and support to those who need it most.
• If someone has made a claim and made genuine mistakes, the ATO will help to resolve them. We want to give support, without the worry of accruing a debt, repaying money or getting penalised for genuine mistakes.
• The ATO is aware of some examples of fraud against vulnerable community members. Individuals Stewardship Group (ISG) members may wish to share our Easy Read scam awareness information with those they represent.

Tax help

Tax help focusses on helping communities, particularly those more vulnerable, to fulfil their tax obligations each year. As well as COVID-19 impacts, one-tenth of the Tax help population is also in declared natural disaster zones.

In the COVID-19 environment, in addition to continuing to provide face to face support, with strict adherence to Department of Health guidelines and any state and territory requirements, Tax Help has had to become more adaptable and flexible. Examples include:

• 300 volunteers providing assistance over the phone
• video conferencing
• recording instructional webinars
• written guidance in different languages.

We are working with Services Australia on delivery opportunities in regional and remote areas.

Members noted that the Tax Clinics are able to support people who are not able to afford tax advice and assistance.

Highest Client Impact Actions program overview

Vulnerable clients

The Highest Client Impact Action program is part of the Better as Usual (continuous improvement) program. It aims to review the range of safeguards in ATO processes and taxpayer engagement to minimise mistakes.

A holistic theme of 'vulnerability' is at the forefront. There is more work required on this theme in order to help the ATO be able to support clients in a vulnerable situation. The ATO is working on defining the term 'vulnerable' to help identify when we may be interacting with such clients. It will also help inform the training packages for ATO staff.

The two principles identified so far are:

• Taxpayers who are subject to external impacts out of their control, like bushfires, floods and pandemics.
• Factors of their personal circumstances: life events (death or relationship breakdowns), remoteness, language, mental health, physical health, reliance on government support or indigenous.

Early analysis puts these taxpayers in the individual, sole trader and small business markets. The ATO also notes that some tax payers can move in and out of vulnerability.

Members noted that it would be good to connect to other organisations who have considered similar themes such as the Australian Bankers Association who have already done some work on financial and elder abuse, and the Australian Financial Complaints Authority.

Debt pilot

Given the current COVID-19 environment, the ATO will focus on assistance and support to the community about outstanding tax debts, rather than recovery, at this stage.

A small pilot is in progress to engage taxpayers in a number of different situations, so that the ATO can improve their long term approach.

The lessons from the pilot will be extended over time to inform debt approaches and to skill debt staff.

A positive outcome from the interactions is that Debt staff members have been able to assist taxpayers on much more than debt. This includes assisting with online access, myGovID and eligibility for the Government Stimulus. These staff members are getting training to help them provide that broader service.

Members noted that a taxpayer who has a tax debt can also have a number of other debts and this would need to be taken into consideration. The ATO will touch base with members of the ISG from Financial Counselling Australia about vulnerability and insights into what the community and their clients are experiencing at this time.

Members insights

The Tax Clinics have observed anxiety from people about making mistakes while claiming stimulus and ensuring staff and students are appropriately trained, particularly on small business issues.

Financial Counselling Australia is reporting increasing demand for its services and appreciates the support from the ATO.

Treasury is focussing on the extension to the government’s stimulus measures for COVID-19. The July 2020 Economic and Fiscal figures released by the government yesterday note a projected debt of $289 billion, which equates to 15% of gross domestic product (GDP).

The Australian Securities and Investments Commission's (ASIC) MoneySmart website provides support to the community on managing debt, refinancing and mortgages. The site includes links to relevant government services too.

Adult Multicultural Education Services (AMES) Australia has been most impacted in Melbourne where they cannot provide face to face services and many of their clients have low or no access to technology. The ATO agreed to share more information with AMES about the Tax help training for virtual delivery.

The Real Estate Institute of Australia noted that due to lag between sales and payments, some businesses will not feel the impact of a reduced turnover until the December 2020 or March 2021 quarters. While they have not been eligible under the reduced turnover test before, they may be then. That scenario and the following questions will be forwarded to the Treasury team working on the JobKeeper extension:

• Can those businesses apply for JobKeeper in December 2020 and March 2021 if they have not applied or claimed earlier?
• Will the JobKeeper turnover test be different for December 2020 and March 2021?

Attendees

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