Wage subsidy refunds after Govt auditing

WELLINGTON: Government auditing of Covid19 wage subsidy claims has resulted in 39 applicants being asked to refund money, but 897 have voluntarily offered to pay back all or some of the taxpayer cash.

So far $10.2 billion has been paid out under the Government’s emergency response.

The Ministry of Social Development (MSD) said, as at April 17, of the 39 applicants asked to refund all or part of the subsidy, 22 had returned $149,000.

Of the 897 voluntary reimbursement offers, 460 had so far returned $3.95 million.

Questionable claims for substantial subsidies from within some business sectors has sparked concern the scheme is open to abuse.

Companies and organisations are eligible to claim subsidies to help pay staff if the business has experienced a minimum 30% decline in ‘‘actual or predicted’’ revenue over a month compared with the same month last year, and the decrease is Covid19 related.

MSD group general manager employment Jayne Russell said applicants do not specify whether they are relying on actual or projected revenue loss at the point they apply, so that information is not available.

As at April 20 the total of wage subsidies paid out was $10.213 billion. Total applications at that time were 519,788.

Of those, 410,984 had been approved and 30,819 declined. Pending were 9474 and 68,511 were closed.

Ms Russell said the Government had made it clear the wage subsidy scheme was set up on a hightrust model in order to deliver funds to support workers, families and businesses.

Asked about how applications are policed, Ms Russell said MSD did prepayment checks with IRD and across existing wage subsidy grants to ensure only legitimate claimants received payments.

MSD had an audit process to identify cases that may require further investigation. Random audits are being undertaken, as well as targeted audits based on data mining, she said.

‘‘Cases where the employer has not passed on the subsidy will be directed to MBIE in the first instance, with MSD and IRD picking up any matters that cannot be resolved in that way.

‘‘Allegations of wage subsidy fraud can also be made to MSD. MSD is using these processes to gather intelligence about which of the 500,000plus applications need to be referred for further enforcement and investigation.

‘‘Any criminal prosecutions will be led by MSD in collaboration with other agencies.’’ — The New Zealand Herald