On 22 November 2024, the Government announced from 1 January 2025 it will stop charging merchant service fees on debit card payments for frontline government services at the Australian Taxation Office (ATO) and Services Australia. The Commonwealth Entities (Payment Surcharges) Act 2024 and related Bills will ensure existing surcharges collected by Commonwealth entities are authorised by law where required.
This measure is now law.
https://www.ato.gov.au/about-ato/new-legislation/in-detail/o…
If that become a reality, people would finally be able to pay taxes with gift cards, for real LOL
People already have been
I was referring to the gift card to pay "taxes" scams.
@blurrybird: It was when coles were running the 10% off promos for the Coles Mastercards instore.
The primary reason was to pay off a large tax bill, at a few % discount. Bonus was that you get CC points for the purchases, but have to keep in mind many CCs have a monthly cap on points earned per billing period.
Back in the day you could get a few more % discount if you bought coles $500 giftcards from shopback etc. at a discount, and then used them to buy the gift cards.
You literally can.
You need to specify apple gift cards lol
They will call you and threaten jail time. Then offer apple gift card as payment.
Opt for the jail time. Free food and accommodation.
Gift cards backed by cryptocurrencies ?
Looks like they have stopped people from using Coles prepaid card to pay now.
Was your payment rejected?
Declined
Was this your 6th payment of the day?
I am doing optussmartpay and it fail for both Vanilla Visa and Coles Mastercard
Finally
… we received advice that the collection by a Commonwealth entity of a payment surcharge is likely unlawful in certain circumstances without a legislative basis to permit it.
Does this mean that we would be eligible for a refund of payment surcharges incurred up until 1 Jan 2025? If it's "likely unlawful", then surely this would be the case?
Edit: Wait, no.. they're retrospectively applying the legislation, to "ensure existing surcharges are authorised by legislation".. so basically, they're winding back the clock to make what was once "likely unlawful", lawful. lmao
eligible for a refund of payment surcharges
Just got a call saying that I'm entitled to a refund and they can process the refund by remotely connecting to my computer.
/$
I thought it was illegal to benefit from proceeds of crime
it is that's why they change the law so it isn't/wasn't a crime 🙂
The norm is to get judged according to the law when the crime was committed. This is institutional corruption at its best.
Good thing the ATO can make up the rules and laws as they go, and apply them retrospectively to suit their needs. Who would have thought an organisation who prosecutes whistleblowers could stoop so low.
Good thing the ATO can make up the rules and laws as they go,
They cannot, the government can, as long as they don't breach our particularly milqtoast constitution, that's literally their job, "to make up rules and laws as they go" Retrospective legilation is used semi regularly. The prior LNP government where advised in this instance and just ignored it all.
Our job is to vote.for the ones we think will do that in our best interest.
It starts on jan 1 like a new year resolution for someone who’s been doing the wrong thing for a long time. They don’t even want to make it right straight away.
@dm2 Edit: Wait, no.. they're retrospectively applying the legislation, to "ensure existing surcharges are authorised by legislation".. so basically, they're winding back the clock to make what was once "likely unlawful", lawful. lmao
The govt/parliament has removed the surcharge for ATO and Services Aus payments and also ensured taxpayers won't have to fork out if pedatory lawyers found a way to sue. Seems both reasonable and sensible . After a decade of do nothing conservative govts they're also working to fast track removal of such fees nationally. "As previously announced, the Government is prepared to permanently ban all surcharges on debit cards from 2026, subject to the RBA’s Surcharging Review and safeguards to ensure both small businesses and consumers can benefit from lower costs." Read the Finiance Minister's media statement:
You don't have to tell me to read the statement I was literally quoting from in my comment.
Who cares if "predatory lawyers found a way to sue"? The government's tax agency was charging surcharges unlawfully. The government realised this was unlawful, and instead of refunding taxpayers themselves (which they could've very easily done via said tax agency, and would negate the point of lawyers trying to sue), they've retrospectively made it lawful instead. Imagine if the government did that with Robodebt?
You either didn't read the background or chose to ignore it.
Who cares? I do because unlike you I understand the huge amount of complexity involved and the massive waste of resources (time and money) which would be required to process small refunds and/or defend predatory legal challenges. Govts have far better things to do and far bigger issues to work on. The fact that they acted quickly is a huge plus.
@Igaf: Complexity? Massive waste of resources? The government applies bulk credits and debits to ATO accounts all the time (see HECS debts and retrospective changes to indexation). If the government did that here, there would be no basis for a legal challenge.
I read the full press release. I think it is good that the government is preparing to ban all card surcharges from 2026. I think it is good that the government is removing debit card surcharges on ATO and Services Australia payments from next year.
I do not think it is good that the government has admitted that the ATO surcharges were unlawful, and are retrospectively making it lawful. I do not think it is good that the government charged fees that it shouldn't have, and are now keeping those fees. I do not think the government should have a "get out of jail free card" where they can turn an unlawful act into a lawful one (again, what if the Coalition did that with Robodebt?).
I'm a member of the Labor party myself, but "unlike you" I'm not on my knees with my mouth wide open for them. I do not think any government, no matter the party, should make prior unlawful acts lawful after the fact. It's as simple as that.
@dm02: It's obviously an extremely complex and time cosuming job to trawl through two decades of payments involving Tax and Services Au, track down payees details, have individuals confirm their bank details and process payments, just for those still living.
Your claims to have read the Finance Minister's press release prior to posting your comment is laughable. Had you done so you would have seen this: "likely unlawful in certain circumstances without a legislative basis to permit it." There is no certainty that Howards implementation of those fees was illegal, just an opinion that they were likely done without definitive legal backing in some cases. The government would have had two choices in your scenario - to make ex gratia payments or to engage expensive legal counsel to validate or contest any claims. There's a VAST difference between "likely in some circumstances" and definitely illegal.
@Igaf: Again, I literally quoted "likely unlawful" in my original comment. Rather than saying I should have read the press release, perhaps you should have read my comment before you replied to it.
Who cares if "predatory lawyers found a way to sue"? The government's tax agency was charging surcharges unlawfully. The government realised this was unlawful
You should have read your comment before replying to mine.Being an ALP member obviously doesn't confer either knowledge or understanding of govt.
If it's illegal and already been done, someone should be able to sue.
@onegpt: You can, you'll juat get no where as the alws been changed. Same as millions of other laws.
A similar thing happened to Clive Palmer in Western Australia. He was owned bllions by the WA government, they refused to pay, so he said he would sue, they changed the law and backdated it so not paying was now legal.
Givernmwnts do this often, immigration.law is rife with this as well.
@onegpt: On what basis? That state and federal goverments made a technical error? The Constitution would no doubt have something to say about that.
If you're offended by the outcome write to the Minister or your member of parliament demanding an explanation.
so basically, they're winding back the clock to make what was once "likely unlawful"
The LNP giverment were told the same.thing and ignored it, at least Labor "fixed" it I guess. That aside, retrospective legislation is used reasonably regularly , it's good to be king. WA used it in the Clive Palmer case as another example that springs to mind.
Palmer went to the High Court which thankfully ruled against him.
Debit card vs BPay
Debit card gives you no benefits over paying by BPay??
(I literally just paid $7900 tax bill literally just today, via BPay. 0.79% visa credit surcharge)
(Plus $300 land tax bill today also via BPay)
BPAY has an up to 4 business day processing time. That may be an issue for some people.
Under the BPay rules the recipient has to treat it as paid on the day the BPay was sent (assuming it's before the cut off time).
There are a couple of exceptions, but for all your garden variety invoices this rule applies.
Technically speaking ATO is stating a 4-business-day delay on almost all payment methods: https://www.ato.gov.au/individuals-and-families/paying-the-a…
However I always see payments immediately reflected when paying by card, while a delay (a few hours to a day) by BPAY.
Points from Amex 3pts/$1.
Only 'business' cards were eligible for FF points when I checked before??
You buy the Coles Mastercard with no purchase fee with your Amex and buying the cards counts as supermarket spend. Then you use that card to pay tax.
@WoodYouLikeSomeCash: I need to follow this more closely
I'm now on PAYG and making 2k quarterly installments now
I need to follow this more closely
I was in the same boat as you, until this year.
I was using BPay all the time to transfer the money,
but just tried the prepaid Mastercard method today.
Worked well
( There are daily limits of 6 prepaid cards via the website, and 6 via MyGov, or something like that.
I can't remember them now )
Amex points are greatly reduced for government entities. Also, Amex surcharge is much higher.
OP is talking about DEBIT cards, not credit cards. Debit cards have no points… there is no advantage apart from immediate payments. TBH Bpay takes maybe 1-2 business days now.
Coles Mastercard gift card gets you the points with your Amex.
@WoodYouLikeSomeCash: how does this work? that gift card has $7 purchase fee which works out costing more than the amex fees
I thought government payments weren't eligible for Amex points (hence the need for services like Sniip to funnel the payments through)?
Edit: Just saw that you were referring to people buying Prepaid Mastercards with their Amex card, makes sense
Which AMEX card specifically?
Platinum Edge
This is good news now paying rego last minute no more extra dollar. 😁
its sad that they have to make it LAW
It was law, then they made it so people could pass on their costs to stop Amex charging a boatload, but the issue is most people don't care, so everyone else gets (profanity). They should have just regulated the fees they could charge.
I usually pay with apple gift card (no surcharge) when they call me and threaten jail time.
Yawn
So they were charging fees for Visa/MC Debit charges, same parity as Credit charges? That's typical, right?
Do any retailer EFT terminals charge different fees for Debit vs Credit on Mc/Visa purchases?
So they were charging fees for Visa/MC Debit charges, same parity as Credit charges?
No.
The ATO currently charges the following payment fees for the following payment methods:
| Card Type | Fee |
|---|---|
| American Express | 1.45% |
| Mastercard – International | 1.99% |
| Mastercard – Domestic Debit | 0.20% |
| Mastercard – Domestic Credit | 0.72% |
| Visa – International | 1.99% |
| Visa – Domestic Debit | 0.40% |
| Visa – Domestic Credit | 0.80% |
(Prepaid cards - such as the Coles Mastercard gift card and the Vanilla Visa gift card - are currently classified by the ATO as "Domestic Debit".)
Do any retailer EFT terminals charge different fees for Debit vs Credit on Mc/Visa purchases?
It is unusual to see this happen, but it does happen. Larger merchants that do this (that I can think of) include Origin Energy and Reward Gateway.
I have also noticed a handful of small businesses (e.g. a butcher, a bubble tea place, an independent mechanic) charge a lower payment fee for debit card payments vs credit card payments.
Also Linkt (road toll payments)
(Prepaid cards - such as the Coles Mastercard gift card and the Vanilla Visa gift card - are currently classified by the ATO as "Domestic Debit".)
So from 01.01.25 payments with these cards will not be charged fees?
I am not 100% sure.
We will need to wait and see whether the ATO continues to classify prepaid cards as "domestic debit" or something else from 01 January (e.g. domestic credit, a new category created just for prepaid cards).
Do any retailer EFT terminals charge different fees for Debit vs Credit on Mc/Visa purchases?
Some do some don't - depends on the agreement with the terminal company. Hence why some like Square are all the same surcharge to you.
This measure is now law.
It already was.
The new legislation they introduced retroactively makes the illegal surcharges between 1 January 2003 and 31 December 2024 legal.
Basically they illegally charged those fees for 22 years amounting to billions of dollars, then rewrote the law to make the illegal activity legal and nobody gets a refund.
Do you think they "rewrote this law" now (in 2024), to try and encourage people to use more digital payments for everything ?
I read the government will start to mandate cash cannot be replaced for essential services such as supermarkets.
Typical Friday afternoon "news release"…
https://www.news.com.au/finance/economy/australian-economy/c…
Cafes, takeaways, bottle shops and hairdressers could avoid being hit by an incoming cash mandate, according to a government discussion paper fleshing out recently-announced protections for cash.
The Albanese government unveiled its plan to protect cash as a payment method last month after usage dropped of a cliff in recent years.
About 1.5 million Australians prefer using cash to digital payments, and some in remote parts of the vast continent, it is the only viable option.
Part of the plan includes mandating that businesses accept cash for “essential items”.
A government discussion paper dropped on Friday offered some idea of what may qualify as essential.
Among those that made the essential list are supermarkets, pharmacies, dentists, GPs, hardware stores, insurers, pet stores, vets, service stations and mechanics.
The paper also looked at exemptions, including whether it would be appropriate to only mandate cash be accepted until 10pm for safety reasons, and punitive measures for businesses that fail to comply, arguing customers could be hit with a “cash surcharge” if there were no penalties.
One option included giving compliance powers to the consumer rights watchdog.
“Anti-avoidance measures could assist in preventing businesses from circumventing the cash
acceptance mandate,” the paper said.
“Without these measures, businesses may find otherwise lawful ways to undermine the effectiveness of the mandate.”
France, which has also introduced a cash mandate, takes a hard line approach, making it illegal to refuse cash payments with very few exceptions, including issues with the cash itself, such as damage.
Another exemption is where there is a safety concern for the merchant, such as a shopkeeper working a nightshift.
France’s central bank has said that cash “guarantees that everyone has the freedom to choose how they wish to pay.”
Although, the discussion paper suggested a slightly softer approach was on the cards.
One option was to hand compliance over to the Australian consumer rights watchdog to figure out.
It considered limits on how customers can pay in cash and at what time they can do so, floating a window from 6am-10pm.
It also said caps on cash payments aimed to “reduce the burden on businesses by limiting the volume of cash transactions they must handle, while still ensuring that consumers can use cash for smaller, everyday purchases”.
Other developed economies that have introduced similar mandates include Spain, France, Denmark and Norway.
Norway was a world leader in transitioning to a cashless society, but its parliament passed laws mandating business continue accepting cash amid heightened security concerns from Russia.
Final details of the mandate will be announced in 2025. Subject to the outcomes of consultation, the mandate would commence from 1 January 2026.
If they're going to mandate cash for small businesses, they should mandate an option for Medicare, Centrelink and public sector wages to be available in cash.
Criminal decides to stop committing crime = bargain?
Your ideas are intriguing to me and I wish to subscribe to your newsletter.
They could have had a better discount during the Black Friday sales! ;-)
How about SRO victoria and land tax? Still have to pay a surchage of 0.45%..
Does anyone know if there is a way of getting prepaid visa/mastercards of higher denominations i.e. $5000 or $10,000 per card?
Surely they’re aware of people using them for this method and could accommodate
Nah that would be too risky for everyone. Sometimes things go wrong with these gift cards. No issues would be willing to risk refunding that kind of amounts for stolen/hacked cards.
Who are the people that pay tax to ATO? For salaried employees it is is deducted by employer (PAYG) and paid to ATO. Is it self-employed and business people that we are discussing here using gift cards to pay ATO?
Yeah mostly those as the bulk of their income will have no withholding but also those who have non-salaried income streams more generally (e.g. capital gains, rental income).
Employee Share Plans are taxed as income but no PAYG is automatically taken out of payslip. That's a common example.
Don't know why people downvoted you. I am one of the people who has to pay tax because of ESPP.
Yup I've had this for years but down voters have to do their thing despite being wrong. Oh well.
@fredblogs: Per voting guidelines, issue with retailer. Having had personal terrible experience with the ATO making up the rules as they go, this supposed deal felt like more of the same BS from them
Your employer withholds tax on what they pay you but they can't withhold tax from any other money making endeavours you have such as bank interest, share dividends, capital gains you have made etc…
Anyone earning any money outside of their employment salary. Bank interest, dividends, capital gains, employee shares.
ATO breaks the law for 2 decades, rewrites law to undo criminal act and promises to stop doing it, then claims to be the hero saving taxpayers money.
Nothing to see here.
At least do some background reading before you give us the benefit of your opinion.
Excellent
Typical gouge by Australian corporations including government departments. What an absolute joke! Inflation is sticky ( real inflation above 3%) because prices are not coming down by the gouge brigade. It's been and will continue to be open slather until price controls are introduced.
Will be interesting to see if prepaid visa / master will be free fee as well (Coles prepaid Mastercard and Vanilla visa / master card)