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  • Individuals Stewardship Group key messages 4 April 2018

    The Individuals Stewardship Group met on Wednesday 4 April 2018, co-chaired by Alison Lendon, ATO and Craig Hall, National Seniors Australia.

    Getting to know our members

    H&R Block have been operating in Australia since 1971 with over 470 offices across Australia and up to 2,500 trained tax consultant during peak periods. They offer in person and online services including preparation of all types of tax returns, a broad range of small business accounting services, entity set ups, financial statement preparation and are moving into financial advice services. H&R Block are actively engaged in their local community and by various large organisations to speak on tax and superannuation matters.

    ETax are a family owned company established 20 years ago, practicing entirely online. They develop their own software according to international standards for online systems. Etax ensure their agents are trained and that all returns are checked by a senior person prior to lodgment. They have a strong focus on continuous improvement and regularly survey their clients to achieve that.

    Both H&R Block and Etax are also members of the Tax Practitioner Stewardship Group and actively engaged with the ATO on emerging trends they see and advocacy.

    Whole of Government Digital Identity

    The ATO is leading the Whole of Government Digital Identity program. The initial focus is on delivering a solution so that individuals can establish a digital identity as proof of identity to more easily interact across government agencies. The IT infrastructure will be built so that it can be expanded to other business services and third parties in the future.

    Enrolling a ‘digital identity’ is optional and existing channels (eg phone and shopfronts) will continue to assist those who are unable to go digital.

    Members’ feedback on the initial design included that there is more work to do to build trust and confidence in the community about the value of setting up a digital identity. The process needs to be as simple as possible and the terminology easy to understand. The design also needs to support the ability for people to interact on another’s behalf (eg power of attorney) and safeguard them from fraud or abuse. User testing of the design with the community is underway and the next iteration will be brought back to a future meeting.

    Super overview

    The proposed Superannuation Guarantee (SG) Integrity Measures, introduced in Parliament on 28 March, are aimed at protecting employee’s super entitlements. The proposed changes fall into three categories:

    • extending visibility of SG payment by extending Single Touch Payroll (STP) to all employers from 1 July 2019, super funds will also commence reporting the receipt of payments in near real time
    • providing greater assistance for businesses by introducing direction powers to require an employer to obtain education, ie cash flow training
    • strengthen the ATO’s powers to deal with employers who repeatedly fail to pay SG by allowing the ATO to disclosure more information to employees on unpaid SG, strengthening ATO powers to recover unpaid amounts through the use of Director Penalty Notices and security bonds. And introducing a SG taskforce for the next three years to undertake additional compliance activities.

    It should be noted that 95% of SG is paid without the need to the ATO to take action.

    The ATO administers ‘unclaimed’ superannuation. Superannuation accounts are transferred to the ATO when the balance falls below $6,000 and there has been no contribution to the account in over 5 years and the account holder’s contact details are unknown/no longer current. There is approximately $18 billion in lost and unclaimed superannuation, of which $6 billion is being held by the ATO and the balance is held by super funds for ‘lost’ members. Individuals can check for both lost and unclaimed superannuation through myGov and have the option to consolidate their funds if they choose to do so. The ATO is about to write to approximately 100,000 individuals, where we have contact details, about their unclaimed superannuation.

    Personal Super Contribution Deductions changes from 1 July 2017 mean that most Australians under 75 can claim an income tax deduction for personal superannuation contributions made to an eligible superannuation fund. To claim the deduction, individuals need to have lodged a Notice of Intention with an eligible superfund at the time they lodge their return. Updated information is on the ATO’s website and included in the Tax Time communications strategy.

    Single Touch Payroll

    From 1 July 2018, employers with more than 20 employees are required to use STP. Individuals will be able to see all their pay and super information online through their myGov account and see their year to date position. STP will also enable individuals and the ATO to take follow up action on unpaid SG earlier as well as identify if an individual is going to be in a debt position due to a second job or higher education contribution scheme loan.

    As part of STP, the ATO is proposing to progressively release an online employee commencement functionality over three phases. Phase 1 is to be implemented in July 2018, providing a link from the employer software to ATO online, allowing individuals to complete information in ATO online and return the data to the employer.

    Members supported the direction for Single Touch Payroll, particularly helping to identify unpaid SG for employees.

    Tax Time Communications Strategy

    The ATO’s Tax Time communications strategy is a year round approach this year focusing on supporting people to lodge no matter which channel they use and helping them get it right.

    Recent research highlighted that people wanted a personalised approach using the data that the ATO already collects/has about them, they wanted the ATO to be part of their lives and to hear more from the ATO.

    As a large number of individuals use a tax agent, the ATO is working with a group of agents to improve communication products to help agents provide relevant tax and superannuation information to their clients.

    Members agreed that messages need to be more targeted to help people understand how the information relates to them and how the tax and superannuation systems benefit the community. They highlighted the Deductions for specific industries and occupations posters as a great way to engage people as they are practical and easy to understand.

    The next meeting will be held on 10 July 2018.

      Last modified: 03 Oct 2018QC 56916