Centrelink orders jobkeeper recipients to pay back $32m, while profitable businesses allowed to keep funds
The federal government has sent more than 11,000 people Centrelink debt letters worth a total of $32m claiming they were overpaid due to jobkeeper, while resisting calls to claw back money from businesses who got the wage subsidy and then made a profit.
Services Australia has told Senate estimates 11,771 people have had a debt raised “after the completion of a review of their income support payments and the jobkeeper income that was paid to them by their employer”.
“As at 30 April 2021, approximately $32.8m in debt has been raised through completed reviews,” the agency said in response to questions from the Greens senator Rachel Siewert.
Debts that have been raised have only been issued to the welfare recipient, not yet recovered.
Siewert said the data revealed a double standard between individuals receiving income support and businesses who claimed the wage subsidy.
“It is farcical that the government is chasing individuals for so called debts for what will be genuine mistakes in a confusing system when they have given millions to billionaires,” Siewert said.
People on welfare benefits are required to report their income from other sources to Centrelink, with the information used to calculate how much money they are eligible to receive.
Under its compliance regime, Services Australia staff will check the income reported by the person against tax records and other evidence.
It was a now discontinued version of this process that led to the robodebt scandal.
Services Australia officials told Senate estimates earlier this year that welfare recipients had an obligation to report jobkeeper as “ordinary income”.
“It could impact whether or not they were eligible for a rate of jobseeker or other income support payment or what the correct rate would be,” said compliance general manager Chris Birrer.
However, Jeremy Poxon, a spokesperson for the Australian Unemployed Workers Union, said the system was confusing.
“Judging by the amount of panicked calls we got about it, we – and the department – know jobkeeper was a confusing mess of a system to access,” he said.
Poxon said it was “disgusting, yet sadly unsurprising” that “billionaires like Gerry Harvey have been let completely off the hook” while welfare recipients, who had “engaged with this program in good faith” were targeted by the government.
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In one case Guardian Australia is aware of, a person who received a welfare debt over their jobkeeper income was later sent correspondence saying they could be forced to pay interest if they delayed payment.
That was despite the person asking for the debt to be placed on hold while they sought information about how it was calculated.
While it has raised debts against welfare recipients it says were overpaid due to their jobkeeper income, the government has steadfastly refused to claw back jobkeeper payments from businesses who turned a profit.
Businesses had to demonstrate either an actual or projected drop in revenue to qualify for the payment, but many did not experience these forecast losses.
The billionaire Harvey Norman chairman Gerry Harvey is among those have been criticised for refusing to pay the money back, after raking in $22m and then seeing the company’s profits more than double.
Guardian Australia reported in July that Wesley College, a prestigious private school in Melbourne, offered parents fee discounts of 20% last year after pocketing nearly $20m in jobkeeper payments.
Guardian Australia has also reported fears that millions of dollars in jobkeeper subsidies have also been used to pay big dividends to company
shareholders.
A small number of ASX300 companies are among those have pledged to pay back jobkeeper payments.
A Morrison government spokesperson said there was “no double standard” because “both programs have strong compliance frameworks”.
“Services Australia takes every step to remind people of their reporting obligations,” the spokesperson said.
“Under jobkeeper, where businesses misreported against the eligibility criteria, the ATO has the power to recover overpayments. As at July, $284m in overpayments has been identified and approximately $138m recovered.”
The spokesperson said it was a longstanding responsibility of individuals receiving jobseeker or related payments to report their earnings accurately.
“This process ensures our social security system is sustainable into the future because it means taxpayers only pay recipients what they’re eligible for – no more and no less,” they said.
Hank Jongen, Services Australia’s spokesperson, said the majority of people who received debts were on jobseeker payment.
He said the agency was providing “tailored support for this group including letters and outbound calls to ensure they were aware of these debts”.
Jongen said the agency “may apply interest charges or refer [debts] to external collection agencies as a last resort” if debt recipients did not respond. Bill Shorten, Labor’s government services spokesman, said the debts showed there were “two rules” in Australia under the government.
“At the same time Mr Morrison is gifting $13 billion to big corporations who increased earnings during the Covid lockdowns, he is sending out his goons to collect a few dollars off people who lost their jobs,” he said.
“If you’re a big corporation, they’ll throw millions at you, but if you are a battler they’ll chase you for everything you’ve got.”
On Monday, the government opposed a move from the independent senator Rex Patrick that would require the tax commissioner to disclose which major companies received jobkeeper and how much they had raked in. A similar database exists in New Zealand.
Labor, which has continually called on profitable businesses to pay back jobkeeper, initially backed the move but later pulled its support for Patrick’s amendment.
It said pursuing the issue may have delayed Covid-19 disaster payments being paid to recipients. The original bill Patrick had amended sought to make these disaster payments tax-free.