Hundreds pay back grant

Questionable claims have sparked concerns

Government auditing of Covid-19 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 that as of 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 have sparked concerns that the scheme is open to abuse.

Companies and other organisations are eligible to claim subsidies to help pay staff if the business has experienced a minimum 30 per cent decline in “actual or predicted” revenue over a month compared with the same month last year, and that decrease is related to Covid-19.

The MSD’s 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 of Monday April 20, the total amount of wage subsidies paid out was $10.213b. The total number of applications at that time was 519,788.

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

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

Asked by the Herald how applications are policed, Russell said MSD did pre-payment checks with IRD and across existing wage subsidy grants to ensure only legitimate entities and individuals received payments.

The ministry had an audit process to

identify cases that may require further investigation.

Random audits were 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. The department is using these processes to gather intelligence about which of the 500,000-plus applications need to be referred for further enforcement and investigation.

“Any criminal prosecutions will be led by MSD in collaboration with other agencies.

“Employers make a formal declaration at the time they apply for the subsidy. We notify them at that time that they may be subject to civil proceedings for the recovery of any amount received that they’re not entitled to.

“They could face prosecution for offences under the Crimes Act 1961 . . .” Russell said.

Asked if proof of solvency was required at the time of making an application, Russell said that was not part of the criteria for this policy. She said there would always be a small minority of people who did not do the right thing.