Money & Banking
Loophole in JobKeeper payments worries tax experts
A large loophole has been found in the assessment process for the JobKeeper payment that tax experts worry could be exploited by hundreds of thousands of Aussies.
In order to receive the full $1,200 per fortnight in wage support, sole traders will need to show the Tax Office they were working more than 20 hours per week in the reference period.
However the reference period is between the two fortnightly pay periods prior to either March 1, 2020 or July 1, 2020 - whichever had the higher hours worked.
The activity test given to sole traders simply means they need to be "actively engaged in the business" for 20 hours a week to receive the full JobKeeper rate.
However Chartered Accountants tax lead Michael Croker told ABC news that "What you're pointing out is a tempting opportunity.” .
Chartered Accountants represents 120,000 number crunchers around the country.
The profession is already trying to raise the fact it will be difficult for small businesses and sole traders to rally up their hours of work each fortnight.
"The Treasurer announced that for sole traders that they needed to be 'actively engaged in the business' for 20 hours or more per week to get the higher rate," Mr Croker explained.
He noted that they would otherwise only be eligible for the part-time rate of $750.
"Now, you could be washing the dishes at night and thinking about your business at the same time — that's a very loose test."
Mr Crocker says many Australians across the nation will be tempted to rort the system, adding that the JobKeeper system requires a degree of honesty for those applying.
"What we expect to see is common sense prevail around this," he said. .
"I think to a degree we shouldn't make a mountain out of a molehill here.
"We're about the economy and jobs, not about compliance and regulation."
ATO has announced in a statement they have a JobKeeper integrity team whose sole purpose is to make sure JobKeeper is going to those who genuinely need it.
"We use a range of sophisticated data and behavioural models to identify applications which we will need to review before we make a payment," an ATO spokesperson said in a statement.
"We will also continue to review applications after payment cycles to identify any risks and issues which cause us concern."
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