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.

BACKGROUND

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.

How will older Clarence Valley workers now without a job fare under the new employment landscape created by the Morrison and Frydenberg's JobMaker Hiring Credits?

According to the Australian Bureau of Statistics, in the Clarence Valley NSW this is how our resident population breaks down:

Resident population – 51,662 persons as of 30 June 2019

Males – 25,891

Females – 25,771

Gender ratio (number of males per 100 females) – 100.5

Median age – 49.2 years

Age composition of population total – 0-14 years 16.9%, 

15-64 years 56.6%, 65 years and over 26.6%.

There are 3,480 people aged 80 years and older and 8,709 children 

aged between 0-14 years.

The largest age cluster in people of workforce age are those aged 

between 55-64 years.

By 31 March 2020 the Clarence Valley over all unemployment rate was 6.3% - higher than both the New South Wales and national unemployment rate.

A relatively high unemployment rate is a feature of the valley’s economy and from time to time when a new government employment program comes along our communities hope for some relief for the unemployed in their midst.

On 11 July 2014 then Australian Prime Minister & Liberal MP for Warringah Tony Abbott launched the Restart programme.

Restart is a financial incentive of up to $10,000 (GST inclusive) to encourage businesses to hire and retain mature age employees who are 50 years of age and over who have been out of work for out of work for six months or more.

Employment under this scheme was to be for a guaranteed 26 weeks with the hope that employers would retain the subsidised workers as part of their regular non-subsidised workforce after that.

However, in the last six years and four months it appears over half of the funding eamarked for Restart has remained in federal government coffers, only est. 51,190 older workers were employed under the Restart program and 40 per cent of those were out of work within.

This program bears all the features which would make it capable of being gamed by both job service providers and employers.

Now due to the current economic recession in Australia, the Morrison Coalition Government has decided to continue forgetting that older workers exist and, focus instead on those unnempoyed individuals between 66 and 35 years of age receiving JobSeeker, Youth Allowance (Other) or Parenting Payment.

This new program which was due to commence on 7 October 2020 is called the JobMaker Hiring Credit. A total of $4 billion in funding has been allocated to this programe from 2020-21 to 2022-23.

It seems that this too will be a program likely to be gamed by employers…..

ABC News, 31 October 2020:

The Federal Government's new wage subsidy hasn't passed Parliament yet, but some employers are already advertising for young workers who will qualify for the program.

So how does that sit with Australia's anti-discrimination laws, and will the scheme make it more difficult for people who don't qualify to find work?

Here's what we know.

Who will be covered by the wage subsidy?

The JobMaker Hiring Credit will provide wage subsidies to businesses if they take on extra workers, between the ages of 16 and 35, who have been receiving JobSeeker, Youth Allowance (Other) or Parenting Payment.

Employers will be able to claim $200 per week for staff aged between 16 and 29, and $100 a week for those aged 30 to 35.

The $4 billion program, announced in the recent Budget, is currently being examined by a Senate committee, which has received a mixed response so far.

But some online job advertisements are already asking for candidates who fit the criteria.

"This is a newly created role under the JobMaker program and as such candidates will be expected to demonstrate eligibility with the JobMaker provisions," one advertisement read.

"Please confirm your age is between 16y and 35y."

Ads have begun appearing specifically asking only for people who meet the eligibility to apply.(ABC News)

Another ad asked for candidates who would be eligible for the higher Hiring Credit rate.

"To be successful in this role you will have: Eligibility for the JobMaker program (ie be aged 16 to 29 years old and have received income support, such as JobSeeker or Youth Allowance, for at least one of the prior three months)."

Nicole Newport-Ryan lost her job in March, and while she has since picked up part-time work, the 48-year-old is still hoping for a full-time position.

"They may as well write, 'If you're over this age please don't even read the advert,'" she said.

"You know like, don't even bother applying, don't read it, we're not interested in you.

"I think it's absolutely discriminatory."…..

What does the law say?

In a statement, Treasury said Australia's Age Discrimination Act generally made it unlawful to discriminate against someone on the basis of age.

"However, the JobMaker Hiring Credit falls within the exemptions from this general prohibition," it said.

"Individual circumstances will vary, and employers should seek their own legal advice as to how the law will apply to them."

Alysia Blackham, an associate professor at the University of Melbourne, pointed to a couple of exemptions that could apply.

"One of them is if it complies with another law, so once this is passed in legislation, it's possible that it will be exempt on that basis," she said…..

Youth unemployment is also a persistent concern in the Clarence Valley and, I sincerely hope that local employers who are able to hire take up JobMaker Hiring Credits and employ younger people in newly created positions. 

At the same time I hope local employers consider hiring older workers as well, using the Restart program to subsidise their wages for the first six and a half months. The Employer Hotline on 13 17 15 will be able to point prospective employers in the right direction.