ATO Updates Again On Refund Processing

Last week’s Lifehacker post about tax return processing stirred up a lot of comment from readers who had waited more than 14 days for their return. A new update from the ATO explains in more detail what’s going on with processing this year.

The ATO does state upfront that processing hasn’t been as smooth as it would like:

Overall, the regular flow of assessments and refunds has not been as consistent during our first 4 weeks of processing as we would have liked and we are taking steps to smooth out these fluctuations.

With that said, the ATO has processed an additional 800,000 returns in the past week. Added to the 1.25 million we already knew were completed, that makes more than two million handled. Unfortunately, the ATO hasn’t said how many in total were submitted at the date of its latest announcement, or by what means, so we can’t directly assess whether it is meeting its goal of processing 94 per cent of electronics returns within 14 days and 80 per cent of paper returns within 42 days.

The whole post is worth reading if you’re keen on getting a speedy refund. A key point to note if you’re aiming for a speedy return in the future: Processing of returns didn’t start until July 9, in order to allow testing of this year’s tax software. This is apparently standard procedure, and the lesson is obvious: Submitting your return on the first day of the financial year won’t necessarily speed the process up. You’ll presumably still be at the front of the submission queue, but you may well wait more than 14 days.

It’s also worth reiterating a couple of points that came up repeatedly in last week’s discussion. The ATO has a broad goal of processing electronically submitted returns within 14 days, but that’s not a legal requirement. Planning your finances around the notion that you’ll definitely get a return by a specified date is risky, as those commenters who hadn’t seen that target met demonstrated. The ATO does have provisions for helping people awaiting a refund in cases of hardship, as detailed on its site, but you’ll need to be prepared to document actual hardship in detail, not just (say) missed opportunities to buy something on sale.

It’s also worth noting that 6 per cent of returns not processed in that time frame is still a large number of people. Last year, for instance, 2.2 million Australians used e-Tax. If 6 per cent of those people didn’t get a refund within 14 days, that would be 132,000 people. As such, any one person saying “I’ve been delayed and I know lots of other people are as well” doesn’t in itself demonstrate that the system is broken or working less effectively — it often just demonstrates the well-known phenomenon of confirmation bias.

ATO