• Fri. May 12th, 2023

ATO spots $284m in fraud from Covid economic stimulus packages

Jul 14, 2021

The Australian Taxation Office is attempting to claw back hundreds of millions of dollars as a result of individuals and companies committing fraud by rorting Covid-19 stimulus payments, such as JobKeeper and the early withdrawal of super scheme.It launched a JobKeeper Payment compliance program and has identified $248 million in JobKeeper overpayments.
So far $138 million has been recovered, however it is still pursuing $82 million for repayment, an ATO spokesperson revealed.
But the tax agency has decided not pursue $64 million “because they are considered to have been claimed in good faith and passed onto employees”, they added.
The JobKeeper scheme ended up paying out more than $89 billion to almost 3.8 million employees, who worked for more than 1 million businesses.
“We have reviewed more than 200 matters for suspected possible fraud against the JobKeeper payment,” the ATO spokesperson said.
“Following review, many of these matters were not considered appropriate for criminal treatment. We are prioritising matters for criminal treatment where there are more deliberate or intentional arrangements, where there are more sophisticated arrangements and repeated attempts, or arrangements involving a tax professional.”
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AFP involvement
But it was revealed that the Australian Federal Police have been tasked with tackling alleged crimes against the stimulus measures throught its Serious Financial Crime Taskforce (SFCT).
Five operations centre on the JobKeeper payments and four on the early release of superannuation scheme.
Meanwhile, identity theft impacted around 2800 applications for the early release of super, worth less than $18 million, although most of this was prevented from being released or was recovered from fraudsters, according to the ATO.
To date, 47 businesses are seeking to make voluntary JobKeeper repayments, added the ATO spokesperson.
“Of these 33 have repaid $159m, there are another 14 the ATO are in discussions with for another $66m, with a total $225m to be potentially paid back,” they said.
“These businesses were entitled to receive the JobKeeper payments but have decided to make the repayments.”
At least 20 companies have publically revealed they have voluntarily paid or are paying back JobKeeper funds, including Toyota, Domino’s Pizza, Nick Scali and Super Retail Group.
Criminal taxation offences
The ATO also flagged the potential for criminal prosecutions of taxation offences, with 20 investigations completed and four ongoing.
Two people have already been convicted for making false and misleading statements against the Taxation Administration Act 1953, while two individuals are currently before the courts for allegedly making a false and misleading statement, the ATO spokesperson said.
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A further seven briefs of evidence are being considered for criminal prosecution.
“We have also issued six warning letters in relation to JobKeeper matters. Following investigation of three other matters, we assessed that criminal prosecution was not appropriate,” they said. “We have also applied penalties to more than 115 JobKeeper matters.”
Cash flow boost scheme
Some businesses have also been caught out inventing wages to become eligible for the subsidy.
Eligible businesses and not-for-profit organisations who employ staff were able to receive between $20,000 to $100,000 in cash flow boost.
The ATO is currently investigating one matter for a suspected criminal taxation offence relating to the scheme, its spokesperson said.
Around 817,000 businesses were processed as eligible for the cash flow boost as of May 2021, with a total of $35.5 billion in cash flow boost credits applied to eligible lodgements, they added
“But ATO systems have prevented around 243,000 ineligible entities from receiving cash Flow boost credits when they lodged their activity statements,” they said.
“The ATO has denied around 110 entities due to evidence of schemes and denied around 1000 entities due to their aggregated turnover exceeding $50m in relation to the cash flow boost measure.”