Businesses could be repaying JobKeeper if they’ve been overpaid

The Australian Taxation Office has outlined what will happen to businesses that have been paid more in JobKeeper payments than to which they are entitled.

In a recent notice on the ATO website, businesses were warned that they may have received overpayments in JobKeeper if they have incorrectly self-assessed themselves as eligible for the payment.

In identifying overpayments, the ATO outlined three potential courses of action:

• It decides the overpayment does not have to repaid
• It decides the overpayment needs to be repaid by the business
• It decides that another entity that directly or indirectly benefited from the overpayment is also liable to repay the overpayment

For cases where another entity is also liable, the ATO said it may pursue the entire repayment from the business, the entire repayment from the other entity, or payments from the business and the other entity until the overpayment is repaid in full.

When overpayments don’t need to be paid back

The ATO has decided that overpayments don’t have to be repaid if there was an honest mistake.

“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,” the ATO said.

“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.”

Whether the ATO makes that determination depends on the following: 

• The business relied in good faith on a statement made by an employee in their nomination notice
• The business 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

However, the ATO also provided examples of where mistakes will not be viewed as “honest”, including 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 the office about its claim potentially being ineligible and has not taken reasonable steps to check the eligibility before making claims in the future

Where overpayments need to be paid back

The ATO said it will impose administrative penalties if there is evidence of deliberate actions to get JobKeeper payments that a business would not have otherwise been entitled to.

In cases where the ATO demands repayment, the regulator will write to businesses why it thinks there has been an overpayment, how much is needed to be repaid and how they can make the repayment.

However, the ATO also said it will provide support to businesses that are not able to pay on time.

“If you’re trying to do the right thing, we’re committed to understanding your situation and helping you if possible,” it said.

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