JobKeeper payments clawed back by ATO, early release of super opens up risk of financial abuse
The Tax Office has clawed back about $120 million out of $69 billion in JobKeeker payments from businesses it deemed ineligible, but has not found widespread fraud relating to Government stimulus measures.
The ATO’s second commissioner Jeremy Hirschhorn told Senate budget estimates the recovered payments were from applications with either “deliberate” or “reckless” mistakes.
Mr Hirschhorn’s evidence followed Tax Commissioner Chris Jordan’s promise to review the ATO’s administration of the early release of superannuation scheme to ensure it does not get exploited by perpetrators of domestic violence and financial abuse.
Mr Hirschhorn said when it came to JobKeeper, most of the time employers had made honest mistakes.
He said in those cases the ATO often did not ask for funds to be repaid, but stopped employers from being able to claim in future.
He took on notice a question about how many employers had either made deliberate or unintentional errors.
Earlier this year the ATO told ABC News more than 6,500 applications for JobKeeper had been rejected since the program commenced in March, either due to ineligibility or fraud, and thousands more Australians could see their payments docked.
But Mr Hirschhorn told the hearing there had not been widespread high-level systemic fraud across the Government’s assistance packages.
He said cases identified by the ATO of people misusing these schemes had been more “opportunistic”.
Employers are given the JobKeeper wage subsidy to pass on to eligible employees. From late March until September 28, the Morrison Government paid a flat $1,500 each fortnight to everyone eligible for JobKeeper.
This was then cut to $1,200 each fortnight per full-time employee, and $750 for part-time employees.
The wage subsidy will be cut again next year. From January 4 until March 28, businesses will be able to claim $1000 per fortnight per full-time employee, and $650 per part-time employee.
Financial abuse ‘intolerable’ says Jordan
Consumer advocates have also expressed concern about the Morrison Government’s early access scheme which allows individuals to withdraw up to $20,000 — in two separate transactions of $10,000 each — from their super.
Data published by the Australian Prudential Regulation Authority (APRA) shows that as of October 18, more than 4.5 million people have taken a total of $34.4 billion out of their retirement savings.
But consumer advocates including Financial Counselling Australia chief executive Fiona Guthrie have warned women may be pressured by their partners to take money out of their superannuation.
In response to questions from Labor senator Jenny McAllister, it became clear no warnings had been given to people accessing their super about the threat posed by financial abuse.
Mr Hirschhorn said it would be hard to determine if it was happening because people used their own MyGov accounts to apply.
Mr Jordan said the “sheer volume” of people accessing their super early made it difficult to track cases of financial abuse.
But pressed on the matter by Senator McAllister, Mr Jordan said he would investigate it after saying it would be “shocking” and “intolerable”.
“We will certainly refer back to see what we can do now to find any examples or rectify that,” Mr Jordan said.
But Finance Minister Mathias Cormann defended the Federal Government’s handling of the super scheme, saying “you have to accept certain trade-offs when there is a need for speed”.
He said the Federal Government had been motivated by helping Australians, including women, during the COVID crisis.
“And at every election I know that all Australians, including women, have the opportunity to pass judgment on how they value our performance and how they assess our plans for the future compared to the alternative,” Senator Cormann said.