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  • Monthly business declarations for JobKeeper Fortnights in March need to be completed by 14 April 2021 to receive final JobKeeper payments. The JobKeeper Payment scheme finished on 28 March 2021.

    JobKeeper overpayments

    You have received an overpayment if you incorrectly self-assessed yourself (or your employees) as eligible for the JobKeeper payment.

    We understand that some overpayments will arise from people making an honest mistake. We provide further guidance below about how we will manage JobKeeper overpayments, including when a JobKeeper overpayment does not need to be repaid.

    If an overpayment is identified, one of the following will occur:

    • we decide the overpayment does not have to be repaid (typically if you made an honest mistake)
    • we decide the overpayment needs to be repaid by you.
    • we decide that another entity that directly or indirectly benefited from the overpayment is also liable to repay the overpayment – when another entity is also liable, we may pursue      
      • the entire repayment from you
      • the entire repayment from the other entity, or
      • payments from you and the other entity until the overpayment is repaid in full.

    When overpayments don't need to be repaid

    Due to the extraordinary circumstances in the early stages of the JobKeeper program, overpayments may have been made in error as businesses moved quickly to access JobKeeper payments.

    If a JobKeeper overpayment is identified, we may decide the overpayment does not have to be repaid, particularly if there was an honest mistake. This decision is made on the facts and circumstances of each case.

    Factors we may consider include whether:

    • you relied in good faith on a statement made by an employee in their nomination notice
    • you fully passed on the benefit of the JobKeeper payment to the relevant employee
    • the mistake was made earlier in JobKeeper when there was less public guidance.

    Honest mistakes

    We consider a mistake to be honest if it is reasonable to have made the mistake in your circumstance.

    A mistake will not be considered honest if:

    • fraud was perpetrated by either the JobKeeper recipient or another entity
    • there has been intentional disregard of the law or recklessness in its application
    • the entity nominated employees, business participants, or religious practitioners that it should have known would not satisfy eligibility requirements
    • the employer has deliberately not met the wage condition
    • the entity has been contacted by us about its claim potentially being ineligible and has not taken reasonable steps to check the eligibility before making claims in the future.

    Note: this is not an exhaustive list and there may be other circumstances where a mistake is not considered honest.

    Example 1 – New to business sole trader that does not meet integrity rules

    Jack started a new business selling toys at the start of December 2019. He completed the necessary registrations for his new business as a sole trader, including getting an ABN and registering for quarterly GST reporting. Jack also paid other costs in establishing his business. Due to delays in setting up the business, he didn’t make any sales until late January 2020.

    As Jack's business didn’t make any taxable supplies in the December quarter reporting period, the business is not eligible for JobKeeper. This is because it did not make a taxable supply in the tax period that ended before 12 March 2020.

    Jack made relevant inquiries, including discussing his potential application with his tax agent, to determine eligibility before he applied for JobKeeper as a business participant. He received a JobKeeper payment in respect of fortnights 1 and 2. Before payments for fortnights 3 and 4, he received notice from us that he was ineligible under the integrity rules.

    While this is considered an overpayment, Jack will not have to repay the JobKeeper payments made to him for fortnights 1 and 2. Even though Jack didn’t satisfy the integrity rules, for fortnights 1 and 2, he satisfied all other eligibility requirements. It’s reasonable for Jack not to know that he didn’t satisfy the integrity rules when he claimed for fortnights 1 and 2 and it is considered that Jack made an honest mistake.

    End of example


    Example 2 – Employer makes honest mistake regarding employee’s eligibility

    Jo is an Australian tax resident, has one job and is on a partner visa which makes her ineligible for JobKeeper payments. Jo is still working and earning $2,800 per fortnight from MedCo, a company with many employees. After registering for JobKeeper, MedCo gives each of its employees, including Jo an employee nomination notice.

    Jo returns it to them on 1 May 2020. Jo continues to receive her salary of $2,800 gross from MedCo, who are then reimbursed $1,500 for JobKeeper fortnights 1 to 4 for wages paid to Jo. We identify the mistake and bring it to MedCo’s attention after the payment for fortnights 3 and 4.

    As MedCo relied on Jo’s nomination notice, it will have made an honest mistake in claiming JobKeeper for Jo. We will not require repayment of the overpayment for fortnights 1 to 4.

    MedCo will not receive any future JobKeeper payments for Jo.

    Even if the error was identified after fortnight 4, unless there were other factors weighing against the exercise of the discretion, we would not pursue recovery from MedCo. This is because MedCo reasonably relied on Jo’s employee nomination notice and made an honest mistake about whether her visa made her ineligible to receive JobKeeper.

    End of example

    When overpayments need to be repaid

    If we identify you have received an overpayment of JobKeeper that you need to repay, we will write to you to let you know:

    • why we think there has been an overpayment
    • how much you need to repay, and
    • how you can make the repayment to us.

    If you can't pay on time, we can help you. If you're trying to do the right thing, we're committed to understanding your situation and helping you if possible.

    If you do not agree with our decision to require repayment, you can object and ask us to reconsider our decision. 

    Administrative penalties

    Generally, we will not impose administrative penalties for JobKeeper overpayments that were the result of a mistake.

    However, administrative penalties will apply if there is evidence of deliberate actions to get JobKeeper payments that an entity would not have otherwise been entitled to.

    Example 3 – Employer fails to apply correct fall in turnover tests

    Big Business Co (BB Co) has an aggregated turnover well in excess of $1 billion. It had a projected decline in turnover of 35% at the test time, and incorrectly applied the 30% decline in turnover test instead of the 50% test as required in the turnover rules.

    BB Co has applied for JobKeeper on behalf of 1,000 employees and has received payments for JobKeeper fortnights 1 and 2. BB Co met the wage condition for all 1,000 employees by paying a minimum of $1,500 per fortnight (before tax).

    As BB Co did not satisfy the 50% decline in turnover test, it was ineligible for JobKeeper and is liable for the overpayments.

    We will not waive the requirement to repay these JobKeeper overpayments as BB Co did not make an honest mistake; its mistake was not reasonable in all the circumstances. BB Co was reckless in not thoroughly considering the decline in turnover test provisions and the substantial support material published by the ATO outlining eligibility requirements.

    End of example


    Example 4 – Information within the knowledge or control of the employer

    Tony began employment with XYZ Pty Ltd after 1 July 2020, making him ineligible for JobKeeper payments. Tony is still working and earning $2,800 per fortnight. XYZ Pty Ltd gives Tony a nomination notice as they have given them to all staff despite him not meeting employee eligibility requirements.

    Tony returns the nomination notice to XYZ Pty Ltd on 1 September 2020. Tony receives a $2,800 before tax payment from XYZ Pty Ltd per fortnight and the employer receives $1,500 for Tony for fortnights 10 to 13.

    We will not waive the requirement to repay as information pertaining to Tony’s ineligibility was within the knowledge or control of XYZ Pty Ltd.

    It was not reasonable for XYZ Pty Ltd to not know that Tony was not an eligible employee as they held information about his employment status as at 1 July 2020.

    End of example

    Managing overpayments

    If you have enrolled in the JobKeeper Payment scheme, a critical response account will appear on ATO online services. JobKeeper transactions are recorded here, including:

    • business monthly declarations claiming JobKeeper payments made in the previous month (these will appear as credits)
    • reimbursements paid for JobKeeper payments made in the previous month (these will appear as debits).

    From 28 September 2020, general interest charge will automatically apply to outstanding amounts in your critical response account. General interest charge applied before this date will be remitted. These amounts will appear as debit and credit transactions on the account.

    See also:

    Reporting overpayments

    If you:

    • have repaid, or are repaying JobKeeper overpayments, you do not need to include the amount as assessable income in your business income tax return. If you have already included the overpaid amount in your business income tax return in an earlier year, you will need to amend that earlier return to reduce your assessable income by the amount you have re-paid.
    • don’t need to repay JobKeeper overpayments because we have waived it, you will still need to include the overpaid amounts as assessable income in your business income tax return .
    Last modified: 22 Apr 2021QC 63309