CDDA Review Terms of Reference

Review of the Compensation for Detriment Caused by Defective Administration (CDDA) Scheme in relation to the Australian Taxation Office (ATO) and small business.

Terms of Reference:

  1. The Review will examine the operation and implementation by the ATO of the Compensation for Detriment Caused by Defective Administration (CDDA) scheme as it relates to small business.
  2. The Review will address perceptions that the scheme does not always adequately compensate small business taxpayers for the effect of defective administration. It will consider how independent decision making is best achieved in relation to CDDA claims.
  3. For the purposes of the Review, small business is defined as an entity, including companies, trusts, partnerships and sole traders with an annual turnover of less than $10 million per annum.
  4. The Review will consider evidence from the ATO over the last five years, including:
    - the processes used by the ATO to consider and decide on CDDA claims;
    - claims data such as the number of claims involving small business, the number of successful claims as a proportion of total claims made and where the claims are approved, the adequacy of the compensation to the detriment suffered
    - how often CDDA claims are reviewed internally by the ATO and externally by the Commonwealth Ombudsman, and the outcomes of such reviews
    - the cost and time impacts on small businesses which seek compensation through the CDDA process.
  5. The Review will consider the consistency of how CDDA processes involving small businesses are conducted across the ATO, the handling of conflicts of interest, the timeliness of the processes and how effectively the outcomes are communicated to small businesses.
  6. Findings drawn from the Review will allow for evidence based future policy making on the best mechanisms to provide small business with access to a fair, efficient, accountable and transparent system for administrative review. The Review is not a mechanism for review of previous CDDA decisions by the ATO.
  7. The Review will be conducted by the Department of Finance, led by an eminent Australian and supported by a consultant. The Review will consult with small business, the ATO, the Inspector-General of Taxation (IGoT), and other bodies responsible for external reviews, such as the Office of the Commonwealth Ombudsman.
  8. The Review will commence in early 2019 and will be provided to the Department of Finance by mid-2019.

Last updated: 22 March 2019