The new rules apply to companies (or entities taxed as companies) that incurred revenue losses in the 2012/2013 year and paid tax in the 2011/2012 year. In this situation, you have the option to convert these losses into cash. Importantly, it does not matter how large or small your company activities are.
Whilst the refund is broadly limited to $1 million of losses or the balance of the franking account, the potential upside is a $300,000 cash refund. The mechanism to claim this refundable offset is through the company tax return. For 2013/2014 and future years, the losses can be 'carried-back' for up to 2 years.
The catch is that, whilst the new rules are contained in Division 160, we are operating in an environment where the law is yet to be passed. In its Practice Statement, the ATO states that taxpayers should not claim the loss carry back until the law has received Royal Assent.
On a positive note, the loss carry-back rules reflect a recommendation of the Business Tax Working Group and there is no indication to date of the government retreating from these new rules.