ATO will not recover $180 million in JobKeeper payments made to ineligible businesses.

On Friday September 10, tax commissioner Chris Jordan appeared before the Senate Economics Committee to answer questions about the Australian Tax Office's (ATO) administration of the JobKeeper scheme.

Mr Jordan said the ATO had reviewed roughly $12.5 billion of the program, and it had identified $470 million in overpayments.

Of that $470 million, the ATO had recovered $194 million so far, and it was pursuing a further $89 million, while $6 million was in dispute.

But the ATO has determined it will not pursue the remaining $180 million, mostly from small businesses, because employers had made "honest mistakes" — they had claimed the JobKeeper wage subsidy "in good faith" and had already passed it on to their employees.

Mr Jordan said the ATO had also reviewed the number of cases of businesses that forecast a decline in turnover and found "the vast majority of taxpayers undertook the projected decline in turnover test in good faith.”

"Some entities made reasonable forecasts for the eligibility month but ultimately did not experience the projected decline in turnover for the full three or six months."

The Treasury deputy secretary responsible for JobKeeper, Jenny Wilkinson, said it would be “quite challenging” for businesses to pay back JobKeeper, particularly small and medium businesses, and “could be problematic” for Australia’s economic recovery.

Date published 13 Sep 2021