Monday, 1 February 2021

To date only around $120 million in JobKeeper payments appears to have been clawed back from ineligible business and sole trader claimants


On 30 March 2020 the Morrison Government announced it would provide a wage subsidy to around 6 million workers who would receive a flat payment of $1,500 per fortnight through their employer, before tax.

The $130 billion JobKeeper payment was expected to help keep Australians in jobs as they tackled the significant economic impact from the COVID-19 pandemic. The payment was open to eligible businesses that receive a significant financial hit caused by the pandemic and provided the equivalent of around 70 per cent of the national median wage commencing in early May 2020 with payments backdated to 31 March.

The first indication that employers were not going to abide by the rules came in April:

By 21 May 2020 media reports began to reveal that a number of employers had been quick to rort the JobKeeper system.

In June 2020 mention began to be made of ‘pop up’ businesses receiving JobKeeper payments even though these businesses were not created until after the wage subsidy scheme was announced.

By 28 August 2020 more than 15,000 businesses have been removed from the scheme after the Australian Tax Office found them to be ineligible.

In that same month it was revealed that at least 25 companies in the ASX 300 had been paying bonuses worth $24 million to executives and millions more in dividends to shareholders after claiming JobKeeper payments.

Come January 2021 and the Australian Taxation Office is still playing catchup with fraud discovered in the wage subsidy scheme and continues in its attempt to retrieve the hundreds of millions in wage subsidy payments it believes have been paid out in fraudulent employer and sole trader claims.

ABC News, 29 January 2021:

Dodgy employers have signed up jailed criminals, people living outside Australia and even the dead to receive $1,500-a-fortnight JobKeeper payments.

These fictitious employees are among thousands of people being pursued by an Australian Taxation Office (ATO) investigation into rorts of the $130 billion wage subsidy program.

"Client is in jail" is one of the categories being scrutinised as a red flag in around 6,000 cases where employers may have created fictitious employees to take advantage of the JobKeeper scheme, hurriedly launched at the end of March last year to keep the economy afloat during the coronavirus pandemic.

Documents obtained using a freedom of information (FOI) application show that, by the end of September, the ATO was investigating 5,974 cases of "inflated employees" in applications for the wage subsidy.

"The reality is you cannot check every application," said lawyer and corporate investigator Niall Coburn.

"So certain things may have been overlooked, but that doesn't stop the Government from now being able to go back and look at the applications in more detail, and that's what seems to be the case here."

Paying the dead

By the end of September, the ATO had 5,974 cases under investigation, with almost a third found to be ineligible. The majority were ineligible because they "involve employers applying under the wrong ABN (business number)".

It noted there "have also been instances of putting spouses 'on the books'," as well as people overseas ("has a valid visa but … out of the country").

A further category of fictious employees were the dead. "Employee in their JobKeeper application that is deceased," the report observed…..

Fraud prevention efforts

In July, the ATO told ABC News 3,000 staff would be doing ongoing reviews of JobKeeper applications.

"At any particular time, we are reviewing between 2 and 3 per cent of JobKeeper applications," an ATO spokeswoman said.

"We will identify those who are intentionally defrauding the system and we will use the full force of the law [to punish them]."

More than 6,500 applications were rejected for a range of reasons, from people making genuine errors to fraudulent behaviour.

In December, the ABC revealed the Australian Taxation Office (ATO) was pursuing criminal investigations into fraud and had issued fines to program applicants who had made false or misleading statements.


ABC News, 9 December 2020:

The Australian Taxation Office has 19 active criminal investigations into fraud against the $101 billion JobKeeper scheme.

It has also issued fines to another 19 applicants to the wage subsidy program who have made false or misleading statements, and is considering penalties for another 24.

Since JobKeeper was launched in March, the ATO has clawed back $120 million in payments to applicants who made it into the system but were later found to be ineligible.

"While most businesses and employees are doing the right thing, we have identified concerning and fraudulent behaviour and claims by a small number of organisations and employees," the ATO said in a statement.

The agency declined to comment on whether the criminal investigations relate to employers or employees and would not provide details about any of the businesses involved or when the investigations began.

However, ABC Investigations understands employers and individual workers are being investigated over fraud and abuse of the scheme.

Applicants could face a prison sentence or fines if found guilty of defrauding the scheme……

The fraud investigation revelations come as the Australian National Audit Office (ANAO) considers its own probe into the scheme.

According to its website, the ANAO has flagged JobKeeper for a potential audit next year that would include an "examination of the implementation of integrity measures designed to protect the scheme against fraud and other abuse."

The ATO fraud hotline has received more than 10,000 tip-offs about fraud against JobKeeper, including claims that some employers have not been passing on the full subsidy to their employees.

ABC Investigations has also spoken to workers concerned that their employers may have artificially suppressed their revenue in order to qualify for the scheme, for example by delaying invoicing customers or removing popular items from sale in retail stores.

The ATO says it has initiated 14 of the fraud investigations using its powers under the Taxation Administration Act and has referred a further five cases to the Australian Federal Police's Serious Financial Crimes Taskforce.

Smart Company, 10 December 2021:

A marketing company has been made to repay $22,500 in JobKepeer funding, after the Australian Taxation Office received a tip-off the business was misusing the stimulus payments.

The ATO said the tip-off alleged the marketing company had incorrectly claimed JobKeeper for its employees, which came to a total of $12,000 per month.

The ATO’s investigation found two of the company’s four employees were ineligible for JobKeeper, because one was on work experience and not receiving any wages, and the other was hired after March 1, 2020.

The two remaining employees were eligible for JobKeeper, however, the ATO said their employer did not pay them the full $1,500 per fortnight in some periods.

We determined that it was not an honest mistake and required the employer to repay $22,500,” the ATO said.

The ATO says it is closely tracking the misuse of pandemic support.

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