Lodge and Pay Working Group key messages 27 February 2024

Action items update

Action item	02 Pre referral warning letter client list availability for agents
Responsibility	Sylvia Gallagher
Action item description	The availability of lists showing clients who will receive a pre referral warning letter (PRWL) for agent visibility to be investigated.
Status update	Currently this is not part of the External Collection Agency (ECA) referral process, and our current process provides the client and/or agent (depending on preferencing) a PRWL to provide visibility of the potential for referral.   To enact an additional correspondence process, we have determined this would take a minimum of 6 months to implement and would also be subject to EST prioritisation and budget allocation.   This could be reviewed and looked at as a future design process.
Status	Closed

 

Action item	03 Payment conversation procedures
Responsibility	Claire O’Neill
Action item description	Payment plan processes including staff conversation narrative to be shared with working group members to seek insights and support future enhancements.
Status update	A focus group was held 22 February with 9 working group members to delve into this topic. Outcomes will be shared with working group members shortly to ensure the group has visibility of the payment conversation staff will have with clients before closing this item.
Status	In progress

 

Action item	04 Lodge and Pay working group – future topics
Responsibility	Anita Challen
Action item description	A plan of future topics to be discussed in 2024 to be shared with working group members.
Status update	Item included as part of this month’s meeting papers and will be discussed in the action item update.
Status	Closed

Lodge and Pay reset

Anita Challen provided an update on proposed future Lodge and Pay Working Group (LAPWG) topics that included:

• Agent initiated requests, with a focus on deferrals. We will look at reasons for deferrals and the approach in managing it. What is the future of the use of agent-initiated deferrals?
• General interest charge (GIC) – looking at the posture of responses to requests for remission.
• Payment culture – sustainable change and shifting business mindset.

Member comments

• For agent-initiated requests, the Australian Taxation Office (ATO) should think of the tax practitioner relationship with the ATO as a trusted partner of the ATO solution. Agents interact with the ATO to maintain a positive relationship with the agency on behalf of the client. The auto deferral system is good – do not over work it. Include the agent as part of the solution.
• Deferral of payment due dates in isolation of lodgments needs to be looked at.

Further feedback can be sent to TPSG@ato.gov.au

Reset effectiveness

Debts continue to trend in their usual patterns however, growth has slowed in the last few months.

We are not seeing the payment improvements in the small business space we were hoping for. Our focus in the coming months will be on continuing to improve consistency in how the posture reset is being demonstrated – noting rates of GIC remission refusals have noticeably increased since July 2023.

We are focused on the April to May period with a convergence of due dates that has an impact on the workloads and debt book.

We are working closely with our marketing and communications team to look at proactive media approaches.

We have commenced the use of Early Collection Agencies (ECAs). As at the 14 February 2024, over 100,000 pre-referral warning letters were issued with a value of over $2 billion of unpaid debts. Up to this point our data reveals:

• over 5,000 debts have been finalised
• over 5,000 payment plans have been implemented.

We expect that the use of our ECA will now be noticeable in the community with a significant number of clients being referred as well as proactive media articles.

There has been an increase in payment plan refusals. Refusals are on a case-by-case basis and we are providing transparency around information that would support acceptance for a viable business.

Member comments

• If a client is engaged and wants to pay, we should accept their payment arrangement and not disengage them.
• It is not clear what the ATO wants us to do with information that payment plans are not being accepted – what other steps can we take?

 

Action item	LAP – 06
Responsibility	Anita Challen
Action item description	Provide a view of the ATO approach to payment plans, including what this means for clients who are ineligible or are refused a payment plan.

Segmentation

The ATO presented the segmentation framework and approach we would take based on client behaviours.

Segmentation is how we group and treat clients based on their compliance and characteristics in the tax and super system.

The identified high-risk segments include:

• fraud and egregious behaviour
• high value debts, greater than $100,000
• employer obligation debts (super, pay as you go withholding, GST).

Focus will also be given to client’s capacity to pay and age of debt.

By targeting these clients with the appropriate pace of escalation, we will fulfill community and government expectations and foster a better payment culture.

Segmentation is building on our existing approach, and investing appropriately in the above focus areas, and have a better payment culture.

Clients in the high-risk segments will be shifted away from a help and assist approach to a firmer engagement. Clients will be followed up sooner than ever before, whilst still having assurance practices in place.

Members were asked if they anticipate push back from the wider public, if yes, what are the associated risks:

• Members were supportive of the segmentation framework, advising the narrative would be important.
• Suggestions were made to have a system where clients can book a convenient time to discuss their debt/s. It was noted that debts are not owned by specific ECA officers.
• Members noted potential risks to clients and that ATO in terms of scams and questions regarding the authenticity of the ECA acting on behalf of the ATO. A validation process is in place for clients and their agents to verify authenticity of the ECA. If you don’t pay – this procedure has proven effective so far, giving clients greater confidence.
• Suggestions were made to issue monthly or fortnightly statements to those with a continuing debt, like banks. Reminders are provided to clients before payments are due, there are also online services that clients can self-service statements however this will be considered as a potential tactic.
• A considered approach is needed to ensure taxpayers don’t stop lodging statements to avoid payment.

 

Action ID	LAP – 07
Responsibility	Matthew Sykes
Action item description	Investigate options to consider tailored outbound phone calls.