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ATO unfairly shut out late JobKeeper enrolments, says IGTO

The ATO failed to be “fair and reasonable” when considering late enrolments for the JobKeeper program, causing eligible businesses to miss out on the wage subsidy, a new report by the tax watchdog has revealed.

Business Jotham Lian 17 September 2021
— 3 minute read

At least 20 taxpayers made a complaint to the Inspector General of Taxation and Tax Ombudsman (IGTO) after their late JobKeeper enrolment request was denied by the ATO based on restrictive and narrow guidance provided to frontline Tax Office staff.


IGTO Karen Payne found that ATO staff were told to provide JobKeeper enrolment deferral approvals only to cases that matched a list of ATO-specified circumstances, including natural disasters, impeded access to records, death or serious illness of family members, and system issues.

Ms Payne said the approach was out of step with established internal instructions to ATO officers in the form of PS LA 2011/15, which requires officers to apply a “fair and reasonable” approach in considering deferral requests by taking into account all material facts.

In one example, a taxpayer who was stuck overseas caring for a sick relative when the borders closed, failed to receive an enrolment lodgement deferral despite only being able to apply once he returned home and completed hotel quarantine in October 2020.

In another case, an octogenarian couple who operated a travel agency were shut out from a late enrolment despite them only realising in July 2020 that they had been eligible for JobKeeper since its inception.

The IGTO found that the facts and circumstances of each case were not fully considered, and that ATO officers were not allowed to refer requests to a more senior decision-maker unless the officer considered that the case fell within that ATO-specified list.

“This is contrary to ATO instructions which have applied since 2011 in all ATO deferral decisions,” said Ms Payne.

“Essentially, ATO decisions on JobKeeper enrolment deferral requests should be made in a manner that is consistent with the Commissioner’s instructions to ATO staff – which is set out in practice statement PS LA 2011/15. ATO staff have been required to follow this practice statement since 2011.

“Applying the test of what is ‘fair and reasonable’ is vitally important to provide community confidence in the consistency of outcomes for taxpayers.”

As a result of the IGTO’s investigations, the ATO changed its decision-making process in April 2021 and has since reversed its initial decision in 14 of the 20 cases brought to its attention.

Ms Payne fears that many other businesses who have not lodged a complaint with her agency may miss out on a review.

“It’s important that taxpayers and their advisers who requested and have been denied JobKeeper enrolment deferrals should consider if the ATO applied the ‘fair and reasonable threshold’ to their circumstances – in other words, consistent with the Commissioner’s staff instructions in PS LA 2011/15,” she said.

ATO defends its process

Responding to the IGTO report, ATO deputy commissioner Emma Rosenzweig insisted that the Tax Office “did not restrict or narrow the granting of additional time to those in limited exceptional or unforeseen circumstances”.

She said that there were clear procedures in place to enable ATO officers to grant additional time for enrolment “quickly and consistently” at first instance.

“Where requests for additional time did not correspond to a clear circumstance allowing the ATO to streamline decision making, escalation and review pathways were available for applicants to have their situations reconsidered,” said Ms Rosenzweig.

“As extension of time decisions are made on a case by case basis, decisions might be upheld, or overturned based on a review of the facts and evidence, or with the benefit of new information.

“We do not consider that granting requests for applicants on review as being reflective of an overall change in the ATO’s administration of these decisions, and the ATO is not aware of this approach causing widespread inconsistent outcomes for applicants.”

The IGTO, however, did not hold back on her thoughts of the ATO’s initial approach.

“The IGTO is unable to explain why the ATO internal instructions would seek to restrict the application of s. 388-55 of Schedule 1 to the TAA in the context of JobKeeper enrolment, when the JobKeeper measures were introduced to mitigate a period of profound economic pressure and difficulty for many in the community who were impacted by COVID-19,” said the IGTO in her report.

“There is nothing in the Explanatory Statement to suggest that it was Parliament’s intention to restrict the economic relief provided by JobKeeper in this way.

“In fact, the statement in the Explanatory Statement, that ‘Employers that have difficulty meeting the timing requirements may seek such a deferral from the Commissioner,’ suggests a far more liberal application of the lodgement deferral discretion.”

ATO unfairly shut out late JobKeeper enrolments, says IGTO
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Jotham Lian

Jotham Lian

Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.

Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.

You can email Jotham at: This email address is being protected from spambots. You need JavaScript enabled to view it.