The Australian Tax Office (ATO) is reportedly still owed hundreds of millions of dollars from Australian businesses who have tried to rort the JobKeeper wage subsidy. Many of these businesses who have exploited the scheme have received payments despite being deemed ineligible and some businesses have been overpaid.
Over the past few months the ATO has rejected and clawed back millions of dollars worth of covid-19 stimulus payments and it’s compliance action is ongoing.
Since the introduction of JobKeeper in March 2020, just under 3.8 million employees who are employed by over 1 million businesses, have been given access to a combined total of $80 billion worth of payments.
It can be revealed by the ATO that 31,600 applicants for the JobKeeper payment and about 231,000 applications for early withdrawal of super have been rejected as result of ineligibility or fraud. There are hundreds more cases which are currently being investigated.
So far, the ATO has managed to claw back approximately $135 million of JobKeeper payments, with some of the money recouped relating to people who have intentionally planned to defraud the system. Another $155 million is still owed to the ATO.
The ATO has also discovered that close to 12,000 businesses have made mistakes but agreed not to claw back the $50 million relating to these businesses as it was “an honest mistake”.
On top of these outstanding amounts relating to ATO compliance activities, some companies that legitimately received JobKeeper have offered to pay back the wage subsidy after reporting higher-than-expected profits.
Twenty Australian companies have agreed to repay the ATO about $144 million worth of JobKeeper payments, but the ATO has so far received only $20 million in returned payments.
It has also been reported that one unnamed large company has been referred to the Serious Financial Crime Taskforce and is facing potential criminal prosecution.
The ATO believes that it is likely more Australian businesses will come forward to voluntarily report, but the ATO doesn’t expect to see a significant jump in companies defrauding the system.
There are currently five JobKeeper matters which have been accepted by the Serious Financial Crime Taskforce. There are another two matters which are currently under consideration.
There are two active court cases which are related to “false and misleading statements” to deliberately defraud the JobKeeper wage subsidy. Another 16 cases are currently under consideration.
There are also more than 140 cases which have been reviewed for potential fraudulent behaviour. Out of all these cases, one person has been convicted, two matters are currently before the courts and 10 other cases are at the present time being considered for potential prosecution activity.
The JobKeeper scheme will end on 28th March 2021. Since September 2020, over half a million businesses across the country have graduated from the scheme. Despite the schemes success at helping businesses survive during the pandemic there are a number of businesses struggling in industries such as aviation, tourism and the arts and recreation services.
The January Sensis Business Index discovered that 39 percent of small businesses believe that the loss of JobKeeper will have a huge impact on their viability. These figures have increased from 29 percent in November and 31 percent in December.
The survey which was completed by 1,000 small-business owners found that another 51 percent believed that the end of JobKeeper would have a moderate impact on their ability to remain viable. One in 10 businesses who were surveyed believed that phasing out JobKeeper would make no difference to their business.
The Australian Government has also recently announced that the JobSeeker payment will permanently rise to $615 a fortnight from April 2021 onwards. This means that the base rate of the JobSeeker payment will be increased by $50 a fortnight once the coronavirus supplement concludes next month.
The permanent $50 increase will commence on 1 April and will be applied to JobSeeker, Youth Allowance, Abstudy Austudy, and Parenting Payments. The increase is projected to cost about $9bn over the next four years.