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40-656: The law requires each entity that carries on a business in Australia has an ABN and that the ABN appear on each tax invoice and other tax related documents issued by the entity. The Australian Business Register (ABR) is maintained by the Registrar of the ABR, who is also the Commissioner of Taxation. The Registrar registers entities, issuing them with an ABN, while the Commissioner of Taxation issues

80-420: A bank account is held in more than one name, it is only exempt if all account holders are under 16. Children can apply for a TFN and quote it in the same way as anyone else, if they wish. For some forms of income, small earnings are exempt from TFN withholding for any account holder. For example, bank interest up to $ 120 per year is exempt. (However such amounts are still taxable income.) TFNs are issued by

120-634: A class-action suit challenging the legal foundations of the Robodebt scheme, and in June 2021 it was announced that the class action had been successfulll and Justice Bernard Murphy had approved a settlement that the ABC reported was worth at least $ 1.8billion to the people wrongfully pursued as a result of Robodebt, and an additional amount of $ 8.4million was owing to Gordon Legal for their work. On 29 May 2020, Stuart Robert , Minister for Government Services announced that

160-596: A TFN, and a business has both a TFN and an Australian Business Number (ABN). If a business earns income as part of carrying on its business, it may quote its ABN instead of its TFN. The TFN was introduced initially to facilitate file tracking at the ATO, but has since been expanded to encompass income and other data matching. The TFN consists of a nine digit number, usually presented in the format nnn nnn nnn . Strict laws require that TFNs may be recorded or used only for specifically authorised tax-related purposes. The TFN serves

200-424: A Tasmanian pensioner was asked for financial records dating back almost 18 years. The Robodebt scheme also normalised a Centrelink process that reversed the onus of proof that any claimed debt was factual; Centrelink did not require its staff to verify and prove that the information being used to raise the debt claims was accurate. Instead, the individual accused of the debt (often a bogus or wildly inflated figure)

240-540: A benefit for the first time may have never previously needed a TFN. Foreigners in Australia whose visas permit them to work can apply for a TFN online, using their passport number and visa number. Proof of identity is established by the ATO confirming those numbers with the Department of Immigration . As is the case with many identification numbers, the TFN includes a check digit for detecting erroneous numbers. The algorithm

280-655: A call centre operating contract by Centrelink is Stellar, a subsidiary of the Nevada-registered U.S. company Stellar LLC. Following the re-election of the Morrison Federal government in May 2019, the Department of Human Services was renamed Services Australia . In 2016, Centrelink began using a new automated technique (later found to be fatally flawed and unlawful) for reconciling welfare recipients' records against data from

320-554: A process that had previously seen 20,000 debt recovery letters issued per year, this new automated data-matching technique, with less human oversight, saw that number increase to 169,000 letters during July-December 2016. Critics and opponents of the automated process revealed and documented that the errors in the system, which became known colloquially as 'Robodebt' (a title later used officially), had coerced welfare recipients into paying either nonexistent debts, or debts that were vastly larger than what they actually may have owed, with

360-583: A purpose similar to the American Social Security number , but its use is strictly limited by law to avoid the functionality creep which has affected the US counterpart. It also serves a similar function as national insurance in the UK . TFNs have been used by the ATO since the 1930s. At some point in time between 1972 and 1983 the format of tax file numbers changed. The earlier format was still in use in 1972, and

400-404: A reminder of the key provisions of the system, for example from Computershare : If an account is held in the names of multiple investors, each may choose whether to quote or not, but tax is withheld unless at least two have done so. In the few cases that a payee has not supplied the paying entity with their TFN by the time payment is to be made, unless if the payment is exempt, the paying entity

440-425: A subsequent inquiry hearing, and it was again taken on notice. Despite numerous and widespread concerns being raised about Robodebt, the 2018 Australian federal budget indicated that the data matching scheme would be expanded further. In February 2019, Legal Aid Victoria announced that they would challenge the method that Centrelink uses to calculate a person's income, with a spokesperson for Legal Aid stating that

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480-477: Is a Services Australia master program of the Australian Government . It delivers a range of government payments and services for retirees, the unemployed , families, carers, parents, people with disabilities, Indigenous Australians , students, apprentices and people from diverse cultural and linguistic backgrounds, and provides services at times of major change. The majority of Centrelink's services are

520-418: Is based on simple modulo 11 arithmetic per many other digit checksum schemes. The validity of the example TFN '123456782' can be checked by the following process The sum of the numbers is 253 (1 + 8 + 9 + 28 + 25 + 48 + 42 + 72 + 20 = 253). 253 is a multiple of 11 (11 × 23 = 253). Therefore, the number is valid. Centrelink The Centrelink Master Program , or more commonly known as Centrelink ,

560-404: Is legally required to withhold a TFN withholding tax amount at the highest marginal tax rate (currently 47%) from the payment the paying entity is about to make. Similar but stricter rules apply to businesses which do not supply their customers with an ABN. The paying entity would report the TFN and ABN withheld amounts on its next Business Activity Statement (BAS) and add the withheld amounts to

600-447: Is said to be the ATO's last amnesty. The primary purpose of the enhanced TFN system is to allow the ATO to collect income and other information for taxpayers (officially known as "data matching"). This is done by the ATO requiring paying entities (e.g., banks, employers, public companies, superannuation funds, Centrelink and others) to electronically provide the ATO with information of certain types of payments made by them, together with

640-653: The Australian Taxation Office (ATO) in order to allegedly uncover fraud and overpayment, thus facilitating the scrape-back of these alleged debts from clients. In January 2017, it was reported that the scheme was touted to save the government $ 300m and consideration was also being given to recovery action against Centrelink clients on both the Aged Pension and the Disability Support Pension, which allegedly could have raised A$ 1 billion in revenue. In

680-462: The 'robo-debt' debt recovery scheme was to be scrapped by the Government, with 470,000 wrongly issued debts to be repaid in full. The total sum of the repayments is estimated to be A$ 721 million . Opposition Government Services spokesperson Bill Shorten criticised the Government's lack of apology for the scheme, citing the psychological harm to many of those issued with debt recovery notices. While

720-514: The ATO conducted this amnesty so that taxpayers who had previously failed to fully declare passive income such as bank interest, share dividends and so forth and other non-taxpayer persons who had failed to submit income tax returns in previous years could lodge retrospective amendments to returns or lodge retrospective returns. In such cases, persons claiming relief under the amnesty became liable for outstanding income tax, but were generally excused from fines and penalties that would have been imposed in

760-483: The Australian Taxation Office. A new taxpayer receives a tax file number within about a month of making an application and providing proof of identity . Centrelink helps those applying for certain benefits to apply for a TFN at the same time, if they do not already have one. For example, unemployment benefits are subject to the TFN withholding rules if a TFN is not quoted. A young person applying for such

800-447: The Registrar can cancel an entity's registration and thus their ABN. Each of these decisions are reviewable taxation decisions . An entity can apply for an ABN: Before applying for an ABN the entity must have a tax file number (TFN). The ABN is an 11-digit number where the first two digits are a checksum . Unlike with the tax file number (TFN), the ATO has publicised the formula for checking and creating valid ABN checksums. Also,

840-546: The Treasurer Paul Keating announced that the Government intended to introduce an enhanced TFN scheme, and legislation establishing the scheme was passed that year. When the legislation was introduced in 1988 the 8 and 9 digit TFN scheme still applied. However, as the 8 digit TFNs were becoming exhausted, all new taxpayers are issued 9 digit TFNs. The numbers now do not have any embedded meaning. One implication of

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880-447: The absence of the amnesty. The amnesty was subsequently extended beyond October 31 1988, with late enrolled amnesty participants being given until April 15 1989 to lodge amended tax returns or lodge formerly missing returns disclosing additional previously undeclared income. In 2014 the ATO conducted a second amnesty, known as Project DOIT (Disclose Offshore Income Today). The 2014 Amnesty was directed at income overseas. The 2014 Amnesty

920-433: The answering of calls and then keeping their clients 'on hold' for extended periods, sometimes lasting for many hours, as well as subjecting these calls to frequent random hang-ups. Numerous allegations of callous & heavy-handed tactics by Centrelink & its contracted private debt collectors resulted in reports that some recipients had been psychologically traumatised and that there had been consequent suicides, including

960-402: The arrears, plus interest on the arrears). In view of the new legislation, the ATO offered an amnesty from these penalties as incentive for affected persons to amend their returns for preceding years – by including previously undeclared interest income – pay their outstanding tax – without the available penalties being imposed on the increased tax liabilities. Between May 1988 and October 31 1988

1000-423: The associated TFN of the recipient. When taxpayers file their income tax returns at the end of the financial year, the ATO can electronically match the income reported by the taxpayer against the payments reported by the paying entities. The types of income payments covered by the TFN data matching rules include: Other information provided to the ATO using the TFN includes health insurance information, as well as

1040-584: The calculation method used was "crude" and failed to take into account the variation in work periods and hours that many recipients had to juggle, thus rendering any income & consequent debt claim as false. Nine months later in November, the federal government settled the case and admitted that the figures produced by Robodebt's income averaging algorithm (for calculating people's income & consequent debt) were "not validly made" and were unlawful. In September 2019, Gordon Legal announced their intention of filing

1080-485: The creation of the 'Robodebt' moniker). The injustice was further compounded by the ongoing failure of Centrelink call centres and office staff to respond and act within any reasonable time to investigate and correct the bogus debt accusations targeting so many of its clients, with Centrelink's telephone call centres having long become perennially notorious for either failing to be contactable by phone (with all lines often permanently engaged for days on end) or for automating

1120-746: The disbursement of social security payments. Centrelink commenced initially as a government agency of the Department of Social Security under the trading name of the Commonwealth Services Delivery Agency in early 1997. Following the passage of the Commonwealth Services Delivery Agency Act 1997 , the Centrelink brand name came into effect in late 1997. Offices were established nationally to manage services to people in need of social security payments. On 1 July 2011, Centrelink, together with Medicare Australia ,

1160-450: The enhanced system using TFNs to match interest and dividend income with tax file numbers and their corresponding entities – or absence of TFNs/corresponding entities as the case may be – was that it would be increasingly difficult to hide such income from the ATO. There was also a risk that in cases where the undisclosed past tax liabilities were large, offenders could be identified and pursued for arrears plus severe penalties (a percentage of

1200-487: The entity a tax file number . The Registrar issues ABNs only to entities that are entitled to an ABN, which can be: For an entity to be entitled to an ABN, it must: Whether or not an entity is carrying on an enterprise is a question of fact and there are many circumstances where an entity will be carrying on an enterprise. Without being exhaustive, an entity will be carrying on an enterprise if it: The Registrar can refuse an entity's application to be registered. Equally,

1240-448: The excess of tax. Some people and organisations are exempt from TFN withholding; they may state their exemption category instead of quoting a TFN. This includes: People and organisations in these categories may still need to submit a tax return, but generally speaking these exemptions mean those not needing to submit a tax return don't need to get a tax file number. The exemption for children does not apply to company dividends, and if

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1280-466: The federal Labor Party was in opposition prior to the May 2022 federal elections, it committed to establishing a Royal Commission to investigate the Robodebt scandal and, following Labor's return to government as a result of their winning that poll, the new Albanese Labor government announced the establishment on 18 August 2022 of the Royal Commission which, in its final report of 7 July 2023, denounced

1320-480: The later format was in use by 1983. Under the later format, the TFN itself was either 8 or 9 digits, with a check digit. Individuals received a 9 digit TFN and non-individuals received an 8 digit TFN. The quote of the TFN was not obligatory when, for example, lodging a tax return, though failing to quote one may delay the processing of the tax return. In May 1988, following the demise of the Australia Card scheme,

1360-499: The nature of the ABN algorithm means that any 9-digit number can be made into a valid ABN. In the case of companies, the ATO determines the ABN by using the company's Australian Company Number (ACN) to which the two-digit checksum is prefixed. Tax file number A tax file number ( TFN ) is a unique identifier issued by the Australian Taxation Office (ATO) to each taxpaying entity—an individual, company, superannuation fund , partnership, or trust . Not all individuals have

1400-451: The payment it needs to make to the ATO. The paying entity would also advise the recipient of the TFN withheld amount. The TFN withheld amount becomes a prepayment of tax by the taxpayer whose funds have been withheld. When the taxpayer files an income tax return he or she would need to claim the so-called "TFN amounts" against his or her final tax liability, and any excess is refunded. The taxpayer needs to file an income tax return to get back

1440-521: The purchase and sale of property, such as real estate and shares. Because of the community backlash against the aborted Australia Card scheme, the expanded TFN rules are technically optional. The taxpayer entitled to such income payments has a choice between quoting the TFN, or not doing so. As a general rule taxpayers quote their TFN. Institutions usually help by reminding or inviting clients to do so on any new source of income (e.g., new accounts, new debentures, new shareholdings). Forms for quoting include

1480-532: The real amount often being a trivial sum of a few dollars or nothing at all. Some welfare recipients were required by Centrelink to make repayments for the fabricated debts while having to simultaneously engage in official reviews and legal challenges to the sham debt claims. In some cases, the debts being pursued dated back further than the standard Australian Taxation Office and Centrelink mandates for Australian taxpayers and beneficiaries to retain their financial documentation (normally 5 years). In one related case,

1520-411: The tragic case of Corey Web, who had been vulnerable and struggling to repay a Robodebt when he took his own life in 2017. In March 2017, the Robodebt program was the subject of a Senate committee inquiry, where the department was asked how many people had become deceased after receiving a letter under the debt recovery program. After the question was taken on notice, the department was asked again in

1560-465: Was integrated into the Department of Human Services as a result of the Human Services Act, 2011 (Cth), with the department retaining the brand name as part of its set of master programs. In 2016, Concentrix , a business services company and subsidiary of U.S.-based SYNNEX Corporation , was one of the companies awarded a contract to operate call centres for Centrelink. Another company awarded

1600-454: Was required to prove they did not owe the funds, often with no access to their financial records that had frequently been lost, destroyed, or legitimately disposed of as authorised by the governmental policy requirements for record retention. Human interaction in the fact-checking and dispatch of the debt letters was extremely limited, with the process relying on a ubiquitous level of automation based on fatally flawed software algorithms (prompting

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