The Act uses the broad definition of “entity” taken from the Income Tax Assessment Act 1997 (s 6). This encompasses individuals, companies, trusts, partnerships, superannuation funds, government agencies and any other person or group that can receive a payment under the rules. Because the object in s 3 refers to entities “directly or indirectly affected” by COVID-19, the reach is not limited to businesses that suffered revenue loss; it can extend to entities that indirectly benefit when another entity receives a payment (see s 7(2)(i)(ii)–(iii)).

The Commissioner of Taxation is the central administrator (s 5) and therefore every entity that interacts with the Commissioner in applying for, receiving, reporting on or repaying a Coronavirus economic response payment is affected. Entities that make statements in the approved form on which another entity relies can be exposed to joint and several liability under s 11 if those statements are false or misleading and reasonable care was not taken.

Financial institutions holding nominated accounts are indirectly affected because payment to the credit of such an account is taken to be payment to the entity (s 8(4)). Entities that enter into or carry out schemes caught by s 19 are affected even if they are not themselves the recipient of the payment.

Because the Act extends to external Territories (s 4), entities operating in those territories fall within its scope. The record-keeping obligations in ss 14–18 bind any entity that wishes to establish or maintain entitlement, while the overpayment rules in ss 9–11 can create liabilities for entities that received money to which they were not entitled or received too much.

The joint-liability provisions in s 11 can bring related entities (business, family or other connections are expressly listed in s 19(3)(h)) into the net even if they were not the original recipient. Fraud provisions in s 11(2) can capture participants who were not themselves recipients. In short, the Act casts a wide net: any entity that applies for, receives, benefits from, provides information for, or participates in a scheme relating to a Coronavirus economic response payment is potentially affected.

Entities that wish to receive payments have the right to have the Commissioner apply the rules made under s 7. If the rules create an entitlement, the entity has a right to payment into a nominated account (s 8) and a right to object under Part IVC of the Taxation Administration Act 1953 against the six categories of decision listed in s 13(2).

The correlative duties are substantial. The paramount duty is to comply with the pre-payment record-keeping requirements in s 15 and the post-payment requirements in s 16. Compliance with these requirements is a condition precedent to entitlement; non-compliance means the entity “is not entitled, and is taken never to have been entitled” (s 14(1)). Records must substantiate information provided to the Commissioner, be kept in English or readily convertible form, and (for post-payment records) be retained for five years after payment unless the Commissioner notifies otherwise (s 16(6)–(8)).

An entity that receives an overpayment is under a duty to repay the whole or the excess on the day the Commissioner made the original payment (s 9(2)–(3)). That duty carries with it secondary liability for general interest charge under s 10. Where the conditions in s 11(1) or (2) are met, the entity and another entity become jointly and severally liable.

Entities that make statements in the approved form owe a duty to take reasonable care; failure to do so can trigger joint liability for another entity that relied on the statement. Entities contemplating arrangements that might be characterised as schemes under s 19 must be aware that the Commissioner may look at the eight matters listed in s 19(3) and make a retrospective determination cancelling or reducing entitlement.

The Commissioner has rights and powers that correspond to these duties. The Commissioner may require production of records on 28 days’ notice (s 17), may determine that an entity is not liable to repay an overpayment (s 9(4)), may exempt an entity from record-keeping (s 14(3)), and may make anti-avoidance determinations under s 19. The Commissioner may also assume compliance where an undertaking in the approved form has been given, but retains the power to revoke a favourable decision if the undertaking is broken (s 14(5)–(6)).

Rights to review are conferred on dissatisfied entities under s 13. The rules may also deem decisions or notices to have been made or given, which affects the running of objection and review time limits (s 12).

The Act itself creates no criminal offences or civil penalties. Section 20(2) expressly prohibits the rules from creating offences or civil penalties, authorising arrest, detention, entry, search or seizure, imposing a tax or setting an appropriation. Enforcement therefore occurs through the existing architecture of the Taxation Administration Act 1953.

Failure to keep or retain records in accordance with ss 15 and 16 engages the general record-keeping offences and administrative penalties in ss 8L, 8Q and 8T of the Taxation Administration Act 1953 (repeatedly cross-referenced in the notes to ss 15, 16 and 17). Non-compliance with a notice to produce records under s 17 does not trigger an offence under s 8C of the Taxation Administration Act 1953, but the underlying record-keeping obligations remain enforceable.

Overpayments are recovered as debts due to the Commonwealth. The liability arises immediately on the day of the original payment (s 9(3)). General interest charge accrues daily under s 10 on any unpaid balance. Joint and several liability under s 11 allows the Commissioner to pursue either or both parties for the full amount.

Anti-avoidance determinations under s 19 are self-executing once made: the Act is taken always to have had the effect stated in the determination. Because such determinations are not legislative instruments they are not subject to disallowance, although they remain amenable to judicial review and, where Part IVC applies, to objection.

The Commissioner’s power to revoke an entitlement decision after a breached undertaking (s 14(6)) operates retrospectively; the entity is taken never to have been entitled. This can convert a payment into an overpayment and trigger the repayment and general interest charge rules.

Confidentiality of information obtained under the Act is protected by Division 355 in Schedule 1 to the Taxation Administration Act 1953 (note to s 5). Breach of those provisions carries its own offences and penalties outside this Act.

The Act is deliberately woven into the fabric of Commonwealth tax legislation. Definitions in s 6 import the meanings of “entity”, “Australia”, “income tax return”, “income year”, “approved form” and “general interest charge” from the Income Tax Assessment Act 1997 and the Taxation Administration Act 1953. Administration is vested in the Commissioner (s 5), which automatically attracts the confidentiality, objection, review and collection provisions of the Taxation Administration Act 1953.

Part IVC of the Taxation Administration Act 1953 governs objections against the decisions listed in s 13(2). The deeming rules in s 12 interact with the timing rules in Part IVC. Record-keeping obligations are enforced through the existing penalties in ss 8L, 8Q and 8T of the Taxation Administration Act 1953. Payment into a nominated account relies on s 8AAZLH of that Act.

The anti-avoidance rule in s 19 adopts the definition of “scheme” from the A New Tax System (Goods and Services Tax) Act 1999 and uses language reminiscent of, but distinct from, Part IVA of the Income Tax Assessment Act 1936. The eight factors in s 19(3) mirror but do not duplicate the factors in s 177D of that Act.

Section 20(6) permits the rules to prescribe matters required or permitted by other Commonwealth laws to be prescribed by the rules, allowing integration with social security, industry assistance or other statutes. Section 20(5) permits incorporation by reference of instruments as in force from time to time, overcoming the usual limitation in s 14(2) of the Legislation Act 2003.

Constitutionally, s 21 relies on the nationhood power and “all other legislative powers” relevant to each kind of payment. This interaction with constitutional doctrine ensures that each species of payment can rest on whichever head of power is most appropriate (e.g. the corporations power for payments to companies, the trade and commerce power, or the external affairs power).

The Act does not displace general equitable or common-law remedies but operates within the statutory scheme. A determination under s 9(4) that an entity is not liable to repay is an exercise of administrative power and therefore subject to judicial review under the Administrative Decisions (Judicial Review) Act 1977 where appropriate.

Although the Act as originally enacted focused on the prescribed period (1 March 2020 to 28 March 2021), two expansions are visible on the face of the text. The insertion of s 7(1A) extended the rule-making power to payments whose primary purpose is improving employment prospects or increasing workforce participation during the relevant period (7 October 2020 to 6 October 2022). The addition of s 7(1B) authorised payments to entities adversely affected by public health orders for the period 1 July 2021 to 31 December 2022.

These changes were made because the economic shock of the pandemic evolved. Initial support was directed at preventing business closures and job losses during the first wave. As restrictions eased and then re-emerged in response to later outbreaks, governments needed authority to target support at labour-market re-entry and at businesses forced to close or restrict operations by state and territory health orders. The amendments kept the same administrative machinery (record-keeping, overpayment recovery, anti-avoidance) while expanding the permissible objects of payment. Because the rule-making power in s 20 is expressed broadly and is not limited by the earlier sections, the amendments could be effected without rewriting the core integrity provisions.

The commencement table in s 2 shows that the bulk of the Act (ss 3–20) commenced immediately after Part 1 of Schedule 1 to the Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020, ensuring coordinated operation with related measures. The note to the table makes clear that it reflects only the original enactment; later amendments are not recorded there.

The text of the Act does not itself record any decided cases. However, several structural features are likely to generate litigation. First, the breadth of the anti-avoidance power in s 19, which requires the Commissioner to be “satisfied” that a scheme was entered into for the sole or dominant purpose identified, invites challenges on the ground that the Commissioner misapplied the eight mandatory considerations in s 19(3). Because a s 19 determination operates retrospectively, affected entities may argue that the determination itself constitutes an impermissible exercise of legislative power or infringes Chapter III of the Constitution.

Second, the joint and several liability regime in s 11 contains multiple cumulative preconditions (reasonable reliance, false or misleading statement in approved form, lack of reasonable care, direct benefit, and the Commissioner’s satisfaction that it is reasonable for both parties to be liable). Each element is justiciable. An entity joined under s 11 may contend that it did not “directly benefit” or that the Commissioner’s satisfaction was unreasonable.

Third, the retrospective operation of s 14(1) (“is not entitled, and is taken never to have been entitled”) when record-keeping obligations are breached raises questions about whether a payment that has already been received and spent can lawfully be recharacterised as never having been entitled. The Commissioner’s power to revoke a decision after a breached undertaking (s 14(6)) similarly invites arguments about procedural fairness and the limits of retrospective administrative action.

Fourth, the interaction between the deeming rules in s 12 and the time limits in Part IVC of the Taxation Administration Act 1953 is likely to produce disputes about whether an objection was lodged in time. The rule-making power to deem decisions or notices to have been made or given adds a further layer of complexity that may be tested.

Controversies have also surrounded the breadth of the rule-making power itself. Although s 20(2) contains express limits, the ability of the rules to sub-delegate to the Commissioner (s 20(4)) and to incorporate external materials as in force from time to time (s 20(5)) has been criticised as excessive delegation. The fact that the rules can differentiate between classes of entity and classes of payment without further parliamentary scrutiny has been a point of policy debate.

Because the Act relies on the nationhood power in s 21(1), constitutional challenges testing the outer limits of that power in the context of ongoing pandemic-related spending cannot be ruled out, although the additional basis in s 21(2) provides a safety net.

Most practitioners instinctively treat record-keeping as an afterthought; the Act makes it a condition precedent to entitlement. An entity that receives a payment on the strength of an undertaking under s 14(5) can lose entitlement years later if it fails to keep the required records for the full five years. The words “is taken never to have been entitled” in s 14(1) and s 14(6)(d) mean that the statute of limitations for recovery may never begin to run, exposing recipients to indefinite repayment risk.

The joint-liability net in s 11 is wider than many realise. It is not necessary that the other entity be the one who applied for the payment; it is sufficient that the other entity made a statement in the approved form on which the recipient reasonably relied and that the other entity directly benefited. The Commissioner’s satisfaction that it is “reasonable” for both to be liable is a broad discretion that is difficult to overturn on review.

Section 19’s anti-avoidance test uses the GST Act definition of “scheme”, which is famously expansive. The eight factors in s 19(3) include “any change in the financial position of any entity that has, or has had, any connection (whether of a business, family or other nature) with the recipient”. This can bring family trusts, related companies and even employees within the Commissioner’s gaze. Because the dominant purpose test is assessed objectively, commercial arrangements that produce a tax or payment benefit as a substantial incident can still be caught if the Commissioner concludes the requisite purpose existed.

The interaction between s 9(3) (amount due on the day the Commissioner paid it) and the general interest charge in s 10 can produce eye-watering liabilities even where the overpayment was modest and discovered years later. The Commissioner’s power to determine that no repayment is required under s 9(4) is entirely discretionary and not reviewable under the listed objection rights in s 13(2)(c) unless it falls within one of the other paragraphs.

Many entities assume that because payment was made into their bank account under s 8(4) the matter is closed. The Act expressly states that the Commissioner is taken to have paid the entity, but that does not prevent later recovery action if entitlement is later denied or a s 19 determination is made.

The rules can incorporate external instruments as in force from time to time. An entity that complies with today’s ATO guidance may find itself non-compliant if the incorporated document is later amended. The five-year retention period in s 16(6)–(7) continues even if the rules themselves are repealed.

Finally, because the Act extends to external Territories via the s 960-505 ITAA 1997 definition, entities operating in places such as Christmas Island or Norfolk Island can be caught even though they may not be subject to all State and Territory public health orders.

Compliance begins with a thorough understanding of the particular rules made under s 7 that govern the payment in question. Because the primary Act is machinery only, the operative eligibility criteria, amounts, periods and conditions live in the legislative instruments. Entities should obtain and retain a copy of the version of the rules applicable to each payment received.

Before applying for any payment, an entity must create and keep records that substantiate every piece of information it will provide to the Commissioner (s 15(2)). Those records must be in English or readily convertible and should be of a kind and kept in a manner that satisfies any legislative instrument made by the Commissioner under s 15(5). The safest course is to treat the pre-payment obligation as creating a contemporaneous file that will also satisfy the five-year post-payment retention requirement in s 16.

When providing information or making statements in the approved form, entities must take reasonable care. The joint-liability trigger in s 11(1) turns on whether the statement was false or misleading in a material particular and whether reasonable care was taken. Contemporaneous file notes explaining the basis on which figures were calculated can be powerful evidence of reasonable care.

After receipt of a payment, the entity must continue to retain the pre-payment records for five years after the payment was made (s 16(7)) and must keep any additional records required by the rules that substantiate post-payment information (s 16(2)). The five-year clock runs from the date the payment was made, not from the end of the income year or the date of any subsequent audit. If the Commissioner issues a notice under s 17 requiring production, the entity must comply within the time allowed (at least 28 days). Although no offence is committed under s 8C for non-compliance with a s 17 notice, the underlying record-keeping obligations remain enforceable through ss 8L, 8Q and 8T of the Taxation Administration Act 1953.

Entities should put in place systems to monitor any changes to incorporated external instruments, because s 20(5) permits the rules to pick up those changes automatically. If an entity becomes aware that it may have received an overpayment, it should consider voluntarily disclosing to the Commissioner before the Commissioner makes a recovery decision; early disclosure may improve the prospects of a favourable exercise of the s 9(4) discretion.

For arrangements that could be characterised as schemes, a purposive analysis against the eight factors in s 19(3) should be documented contemporaneously. If the dominant purpose is commercial rather than the obtaining of a Coronavirus economic response payment, that should be recorded.

Entities that give an undertaking in the approved form under s 14(5) must treat that undertaking as binding for the full five years. Breach will allow the Commissioner to revoke the entitlement decision and pursue recovery plus general interest charge.

Finally, any entity that receives a notice of a decision it disagrees with should immediately consider its objection rights under s 13 and Part IVC of the Taxation Administration Act 1953. Because the rules may deem the date of decision or notice, time limits can expire earlier than expected. Retaining copies of all correspondence with the Commissioner and all versions of the rules applicable to each payment is the minimum prudent compliance step.

In summary, compliance is not a set-and-forget exercise. It requires contemporaneous, comprehensive records, ongoing monitoring of the rules and incorporated instruments, careful drafting of statements to the Commissioner, and a five-year retention discipline that many entities underestimate. Those who treat the payment as “money in the bank” without maintaining the evidentiary trail do so at their peril.