The $70 billion JobKeeper wage subsidy program has potentially been rorted by thousands of businesses but not one has been penalised despite more than 8000 tip-offs to the tax office and 2200 employees found to be on multiple applications for payments.
JobKeeper began on March 30 and until August 26, more than 15,000 businesses have been removed from the scheme after the Australian Tax Office found them to be ineligible. During the same period, the ATO received 8000 tips from the public pointing to 6250 businesses or sole traders who may have been rorting the system.
The ATO has told more than 8000 businesses they may need to repay JobKeeper money because their paperwork did not adequately demonstrate their eligibility.
To get onto JobKeeper, employers and sole traders estimate their turnover has, or will likely, fall by 30 per cent or more (if turnover is under $1 billion). For bigger firms, a drop of 50 per cent or more is needed. Businesses are expected to provide evidence of revenue declines.
The most common JobKeeper tip-offs so far have been allegations that employers are not passing on the full $1500, businesses not meeting turnover requirements to get into the program, fair work issues such as not paying penalty rates, and employee eligibility.
The Age and The Sydney Morning Herald have learned that full-time employees with a casual side job have been able to claim JobKeeper to get their second job's pay doubled despite their main job not being impacted.
A man working for a Sydney restaurant chain is not being paid penalty rates at all because his employer is using JobKeeper to pay a flat rate and less tax than they would normally. The Herald has seen his roster and payslips to confirm this.
Money has been flowing to more than 3.5 million people via businesses covering about one-third of the pre-pandemic private sector but concerns about where the money is going are growing.
Questions have been raised about the use of government support during the pandemic with at least 25 companies in the ASX 300 paying bonuses worth $24 million to executives and millions more in dividends to shareholders after claiming JobKeeper.
Company profits were up by 14.9 per cent in the June quarter, while wages and salaries fell by a record 2.5 per cent.
The ATO warned businesses in June that employers found to have knowingly rorted the system may face fines of up to $126,000, or 10 years in prison.
An ATO spokeswoman said no administrative penalties had been applied after JobKeeper reviews but a financial crime taskforce did have 10 cases it was investigating.
"If an overpayment of JobKeeper is identified, we may decide the overpayment does not have to be repaid, particularly if there was an honest mistake," the spokeswoman said. Recovering overpayments made to people who acted dishonestly might include extra penalties, she added.
The JobKeeper wage subsidy is a good idea "being badly implemented and poorly monitored", Opposition Treasury spokesman Jim Chalmers said.
"The Treasurer has failed to design an adequate JobKeeper compliance regime capable of balancing genuine mistakes caused by confusion and volatility with vigilance against intentional breaches," Dr Chalmers said. "Businesses which have deliberately short-changed workers or rorted the system should be dealt with."
Treasurer Josh Frydenberg said enforcement of "any non-compliance" with the program was a matter for the ATO.
"Whilst we recognise most businesses and employees are doing the right thing, there are a range of penalties available to the ATO, consistent with other tax laws they administer," Mr Frydenberg said.
The $1500 fortnightly wage subsidy will be reduced from September 28 to either $1200 or $750, depending on employee hours worked. From January, payments will be reduced further.
Confidential tips about potential JobKeeper fraud or behaviour of concern can be made at ato.gov.au/tipoff or by calling 1800 060 062.