The Australian Taxation Office (ATO) has revealed it is still owed hundreds of millions of dollars from companies that have attempted to rort the JobKeeper wage subsidy, were declared ineligible or were overpaid.
- More than 31,600 applicants for JobKeeper were rejected due to ineligibility or fraud
- Twenty Australian companies have volunteered to repay $144 million worth of payments, but the ATO has so far received just $20 million
- Individuals and companies are also having to repay incorrect payments for the early super release scheme and business cash flow boost
In an exclusive interview, ATO second commissioner Jeremy Hirschhorn told ABC News that while the agency had already rejected and clawed back millions of dollars’ worth of coronavirus stimulus payments, its compliance action was ongoing.
Since the JobKeeper wage subsidy was introduced almost a year ago in response to the COVID-19 pandemic, almost 3.8 million employees, employed by more than 1 million businesses, have received more than $80 billion in payments.
Mr Hirschhorn said more than 31,600 applicants for the JobKeeper payment and about 231,000 applications for early withdrawal of super had been rejected due to ineligibility or fraud, and hundreds more investigations were continuing.
The ATO has so far clawed back about $135 million of JobKeeper payments, with some of the money recouped relating to people deliberately acting to defraud the system. Another $155 million is still owed to the ATO.
The agency also found about 12,000 businesses had made mistakes but agreed not to claw back the $50 million relating to these businesses as it was “an honest mistake”.
Aside from those outstanding amounts relating to ATO compliance activities, some companies that legitimately received JobKeeper have volunteered to pay back the wage subsidy after reporting higher-than-expected profits.
Twenty Australian companies have promised to repay the agency about $144 million worth of JobKeeper payments, but Mr Hirschhorn said the ATO has so far received just $20 million.
He also revealed one large company has been referred to the Serious Financial Crime Taskforce for potential criminal prosecution.
Mr Hirschhorn said it was likely more companies would come forward to voluntarily report, but he did not expect to see a significant jump in companies defrauding the system.
Repayments a question of ‘morality, not legality’
Mr Hirschhorn said the ATO administers the JobKeeper scheme based on revenue, not whether companies are profitable and paying out dividends.
However, the ATO second commissioner has warned companies that received COVID-19 support payments — while still paying executive bonuses or increasing dividends — risk damage to their reputations.
He welcomed “those companies that realise in hindsight they did not require support and are working with us to pay it back”.
Some companies that have made public declarations that they are paying back JobKeeper funds include Adairs, Nick Scali, Toyota, Dominos, Super Retail Group, Iluka, Cochlear, Ingenia, Santos, Collins Foods, Nine, CIMIC, Seek, Blackmores, Lynas, Qube, Healius and Adelaide Brighton Cement.
The ATO did not reveal which of these companies have so far made the $20 million in payments the ATO has received and which have promised to pay but not done so yet.
There has been widespread public concern about executives walking away with bonuses while the companies they run have been receiving taxpayer support throughout the pandemic.
Business Council of Australia chief Jennifer Westacott and proxy advisors Ownership Matters have been among those warning against bonuses being paid if companies received JobKeeper payments.
Labor MP Andrew Leigh said repayment of JobKeeper post a company making profits was not an issue of legality but morality.
“Firms such as Premier Investments and Harvey Norman have received JobKeeper, despite increasing their profits, and effectively used it to subsidise dividends rather than keep people in work,” Dr Leigh said.
“I hope we will see more [companies volunteering to pay back JobKeeper subsidies].”
JobKeeper matters referred for criminal prosecution
Mr Hirschhorn said there was currently just five JobKeeper matters accepted by the Serious Financial Crime Taskforce, with another two under consideration.
There are also two active court cases in relation to “false and misleading statements” to deliberately defraud the JobKeeper wage subsidy, with another 16 under consideration.
Mr Hirschhorn said there were also more than 140 cases reviewed for potentially fraudulent behaviour.
Of those, one person has been convicted, two matters are before the courts and 10 cases are currently being considered for potential prosecution activity.
He said that while the ATO had been considering all risks, including the prospect of dead people getting the money, there were in fact no fictitious dead people who received JobKeeper.
“Nobody was going around cemeteries taking down names — that just did not happen,” he noted.
Businesses invent wages to get cash flow boost subsidy
On the small business cash flow boost subsidy, Mr Hirschhorn said it had supported 800,000 small businesses with $35 billion in payments.
To apply for it, people just had to lodge their activity statement around wages and taxes withheld.
“We did find some people who discovered wages for the first time and that was an area where our compliance focused,” Mr Hirschhorn said.
“For some, we found the [wages withheld] was more creative — they did not have employees.”
The ATO also undertook mailout campaigns which had resulted in more than 1,000 entities self-amending their activity statements to correct incorrectly reported amounts.
This, Mr Hirschhorn said, resulted in about $6.3 million of cash flow boost entitlements being adjusted.
Six criminal investigations on super early release scheme
On early release of super, Mr Hirschhorn said that around 4.55 million applications worth $38 billion were approved by the ATO for more than 3 million people.
He said about 2,800 applications, worth less than $18 million, were made by people suspected of attempting to defraud the system by trying to steal the identity of someone else — most of this amount was prevented from being released or was recovered from fraudsters.
He said the Serious Financial Crime Taskforce had commenced six investigations in relation to these.
As part of the initial application process, about 231,000 applications were rejected or cancelled.
This was mainly due to individuals submitting more than one application in the same financial year or being found to be ineligible based on other criteria.
Mr Hirschhorn said, after the initial application process, compliance activity was undertaken and less than 700 individuals were found to be ineligible for the COVID-19 early release of super scheme.
Of this group, 84 per cent had submitted ineligible applications in two financial years and 16 per cent had at least one application found to be ineligible.
“These individuals received funds from their super accounts,” Mr Hirschhorn said.
“This will result in $12 million of released super being included as assessable income by those individuals as part of their income tax return.”