Grant Robertson warns employers with wrongly-claimed wage subsidies 'our audit teams will be looking'

Friday, 24 April 2020

Wage subsidy money claimed by employers for their workers is under scrutiny.

Businesses that have claimed wage subsidies that they now think they might not be entitled to have been warned by Finance Minister Grant Robertson to come forward.

A total of $17.5 million of wage subsidies is being repaid by more than 1200 companies.

Finance Minister Grant Robertson previously warned anyone who abused the system, would be chased down.

$16.2m of the repayments were volunteered by companies and the self-employed that claimed the subsidies in error.

But random and targeted audits into 2435 wage subsidy claims and 292 allegations of abuse of the scheme have led to 56 applicants being asked to repay $1.25m.

Robertson said the false claims represented a 'fraction' of the 500,000 claims for $10.3 billion that had been paid out so far.

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But he said the Government had a duty to all New Zealanders to make sure taxpayers' money was 'going to where it is intended to support the economy'.

'Everyone who has taken money from the wage subsidy scheme needs to know that our audit teams will be looking across the full sweep of applications,' he said.

If anyone believed that 'perhaps their circumstances are not what they though they were when they applied', they should get in touch with the Social Development Ministry (MSD), he said.

MSD had a team of 104 fraud experts and investigators auditing the applications, he said.

Social Development Minister Carmel Sepuloni said earlier that 'the vast majority of businesses' were doing the right thing and didn't need to worry about the audit process.'

The subsidy is available to businesses including the self-employed and sole traders who experience or expect a 30 per cent drop in revenues in any month between January and June that is attributable to Covid-19.

'For some businesses, circumstances change following receipt of the subsidy, including where insurance may have been received, or new revenue forecasts show the business won't suffer a 30 per cent drop,' Sepuloni said.

'A number of businesses have come forward when this happens by offering to repay the subsidy and we encourage any business who may have made a mistake to do the same.'

Businesses which provided false or misleading information to claim a wage subsidy were first asked to repay the money, and told they could be taken to court, including for Crimes Act charges.

'New Zealand taxpayers and those who have accessed the scheme properly expect to see a fair process,' Sepuloni said.

'If a business provides false or misleading information and knowingly commits a crime, they will held to account. That's a given.'

As of Tuesday, MSD had resolved 88 of the allegations made about false claims and the remainder were still being investigated, Robertson said.

The database of Work and Income subsidies allows employees to check if employers have claimed on their behalf.

The subsidy allows eligible businesses to claim a lump sum of $7029 per full-time worker and $4200 for each part-time worker.

The Covid-19 subsidy is designed to subsidise the employment of full-time workers to the tune of $585.80 a week until the end of June, and part-time workers by $350 a week.

To qualify, employers must keep paying staff at least 80 per cent of their normal income where reasonably possible.

Robertson said the Government's economic plan would consist of three 'waves', first to fight the virus and 'cushion the blow', then to position for recovery and the kickstarting of the economy, and finally to 'rebuilding' the economy.

'This has been a truly 'NZ Inc' effort in fighting a 'once in a century' social and economic crisis,' he said.

'This year's Budget will devote much of its resources to positioning for recovering and kickstarting the economy.'

It was a distressing time for people who had lost their jobs, with a 30,000 jump in the number of people seeking JobSeeker benefits since March 20, he said.

'We have to bear in mind though that this represents less than 1 per cent of total population,' he said.