JobKeeper cost revised, impact halved

Late last week, the ATO and the Treasury issued a joint statement, explaining they have advised the government of a reporting error in estimates of the number of employees likely to access the JobKeeper program.

After reviewing the 910,055 forms received for JobKeeper, the ATO found that around 1,000 of those businesses appear to have made significant errors when reporting the estimate of eligible employees on their enrolment form.

The most common error was that instead of reporting the number of employees they expected to be eligible, they reported the amount of assistance they expected to receive. For example, over 500 businesses with “1” eligible employee reported a figure of “1,500”, the amount of JobKeeper payment they would expect to receive for each fortnight for that employee.

Although the error is said to have no consequences for JobKeeper payments that have already been made to eligible businesses, it does mean that a significantly smaller number of employees will benefit from the program, reducing the total estimated cost to some $70 billion.

The Treasury and the ATO said that the error was not picked up earlier as their primary focus in the first fortnight of JobKeeper payments was on ensuring that JobKeeper payments were paid promptly to those eligible for them, and not paid to those who were ineligible.

“These initial estimates from businesses of employees covered are not linked to payments, and so were not as carefully analysed,” the joint statement reads.

Another reason given for the significantly smaller cost of JobKeeper is the level and impact of health restrictions not having been as severe as expected and their imposition not having been maintained for as long as expected at the time.

According to the latest data, as of 20 May 2020, 910,055 businesses had enrolled in the JobKeeper program. Of these, 759,654 had made claims in relation to their eligible employees and had their applications processed, meaning that $8.7 billion has already been disbursed to these businesses, covering around 2.9 million employees.

Around 150,000 enrolled businesses are yet to complete their employee declaration, which is required before payments can be made.

Employers are being reminded they can still apply up to 31 May for payments made in April. Moreover, the program will remain open to businesses that meet the eligibility criteria at any time over the six months it is in operation.