Overview

The Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 10) 2021 were introduced to support the Australian Government’s SME Recovery Loan Scheme, which was designed to assist small and medium enterprises that had received JobKeeper payments during the first quarter of 2021. The rules amend the existing Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 to enable financial institutions participating in the SME Recovery Loan Scheme to verify that notices have been provided to entities regarding their participation in the JobKeeper payment program. This was achieved by allowing both authorised deposit-taking institutions and non-authorised deposit-taking institutions to seek confirmation of the information about an entity's election to participate in the JobKeeper payment program. The Amending Rules also include minor adjustments to the payment and notice requirements under Division 4 and 5 of the Rules to ensure they reflect the two-tiered JobKeeper payment system. The policy objective of these amendments is to ensure continued and targeted support to mitigate the ongoing economic impacts of the Coronavirus.

Scope and Application

The Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 10) 2021 applies to financial institutions participating in the Small and Medium Enterprise (SME) Recovery Loan Scheme, including both authorised deposit-taking institutions (ADIs) and non-ADIs. These institutions must comply with the rules to ensure that they can confirm that notices have been provided by the Commissioner of Taxation to entities concerning their election to participate in the JobKeeper payment program. This legislation aims to facilitate the verification of information exchanged between the Commissioner and entities, ensuring that financial institutions can accurately determine whether the information provided is consistent with what has been communicated by the entity or the Commissioner. The rules are applicable nationally within Australia, as they are a legislative instrument under the Legislation Act 2003. There are no stated exclusions, exemptions, or thresholds in these rules; however, they extend the existing confirmation process outlined in the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020. The Amending Rules also include minor amendments to reflect the two-tiered JobKeeper payment system without altering the scheme's operation.

Key Provisions

The Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 10) 2021 (the Amending Rules) introduce changes to the existing rules established under the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (the Rules) to support the implementation of the SME Recovery Loan Scheme. Under section 20(1) of the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 (the Act), the Treasurer can make these rules to prescribe matters required or permitted by the Act, or necessary or convenient to be prescribed for carrying out or giving effect to the Act. The Amending Rules allow financial institutions participating in the SME Recovery Loan Scheme to confirm that notices have been provided by the Commissioner of Taxation to entities concerning their election to participate in the JobKeeper payment program. This provision is intended to ensure that financial institutions can verify if all the information specified in the approved form as having been exchanged with the Commissioner is either provided by an entity to the Commissioner or provided by the Commissioner to the entity. The Amending Rules impose specific obligations on participating financial institutions and the Commissioner of Taxation. Financial institutions must provide a notice to the Commissioner in the approved form, and the Commissioner is required to advise the financial institution if the specified information concerning the JobKeeper payment is information that has been exchanged between the Commissioner and the entity. This process ensures that the information provided by the entity to the Commissioner or by the Commissioner to the entity is verified. Moreover, the Amending Rules include minor miscellaneous amendments to the Rules to ensure that the payment and notice requirements under Divisions 4 and 5 of the Rules appropriately and accurately reflect the two-tiered JobKeeper payment system. However, these changes do not affect the operation of the Scheme and are consistent with the intended policy. Any breaches of the Amending Rules may result in civil or criminal consequences. Although the Amending Rules themselves do not explicitly outline specific offences, penalties, or consequences for breach, any contravention of rules made under the Act may result in civil or criminal penalties as prescribed under the relevant sections of the Act. Generally, penalties for breaches of rules made under the Act may include fines up to a maximum of 50 penalty units, which as of June 2021, equates to approximately AUD 5,300 for individuals and AUD 26,500 for corporations, depending on the severity and nature of the breach. Additionally, serious breaches may lead to criminal charges, which could result in more severe penalties, including imprisonment. The exact penalties would depend on the specific provisions of the Act and the nature of the breach.