JobKeeper fraud: ATO investigates false claims for JobKeeper, focusing on misleading turnover declarations and incorrect redundancy payments

The Australian Taxation Office (ATO) has issued a final warning to businesses engaging in “concerning and fraudulent behaviour” when making JobKeeper claims.

The ATO said in a written statement that it would monitor the integrity of the JobKeeper scheme in its final weeks, with a particular focus on whether businesses claiming payments for outgoing employees also paid the employees the correct redundancy entitlements.

JobKeeper finished on March 28; however, businesses have until April 14 to submit their monthly business declarations for March fortnights.

The ATO uses the mock example of an employee named Malith who works for Wicket’s Sports Emporium to show when an employer’s application for JobKeeper would be denied, on the basis that the employer failed to pay the correct redundancy entitlements.

Malith is informed in January that he will be made redundant and that there is no more work for him to carry out. However, rather than providing Malith with an eight-week redundancy payment, Wicket’s Sports Emporium offers him the option to keep receiving JobKeeper until the end of March as a substitute for his redundancy entitlements.

The ATO said such practices contravene JobKeeper’s eligibility requirements, and applications based on those tactics would be denied.

Among the ATO’s other concerns are whether businesses have made claims for employees who do not have a history of employment in the organisation, and whether they have not paid their employees the correct payment amount before tax.

The ATO says it is pursuing businesses that have either amended historic business activity statements or manipulated the timing of billing or receipt payments in order to meet the turnover test.

The ATO will also investigate claims made by individuals and tax agents including instances where individuals have made multiple claims for themselves as employees, or where tax agents have helped clients obtain JobKeeper payments when they were not in fact eligible.

The $90 billion JobKeeper scheme was one of the emergency measures implemented by the federal government in response to the coronavirus pandemic at the end of March last year. At the peak of the program, more than 3.5 million Australians were receiving JobKeeper.

In February this year, 71% of JobKeeper recipients lived in Victoria and New South Wales, with 369,000 individuals receiving the subsidy in Victoria and 327,000 in NSW, according to Treasury data.