Federal Treasurer Josh Frydenberg has revealed that an excess of $13.8 Billion worth of JobKeeper payments were distributed to businesses that weren’t meant to receive the funding.
A report published by the Treasury outlined that under the JobKeeper regime $11.4 billion and $15.6 billion in the June and September quarters of 2020 or a total of $27 billion was distributed to businesses that did not qualify for the turnover criteria of 30 percent or 50 percent.
A combined amount of $13.2 billion across six months went to businesses that did suffer drops in turnover, though not to the required 30 or 50 percent.
Furthermore, $13.8 billion went to businesses that actually saw turnover increase compared to the year prior.
The bulk of this money tallied at 88 percent, or $12.1 billion went to small businesses with four employees on average.
“JobKeeper payments to these businesses were important to offset the impact of Covid-19 restrictions on their operations and avoid labour shedding,” said the Treasury report.
Defending the payments, Federal Treasurer Josh Frydenberg said the program was “well-targeted” and “highly effective”.
“The program did what it was intended to do. It kept employers and employees connected. It saved more than 700,000 jobs and it supported Australia’s world-leading economic recovery,” said Federal Treasurer Josh Frydenberg.
In recent months the Australian Government has been criticised for its refusal to claw back the large sum of JobKeeper payments that were wrongfully awarded, while chasing up Centrelink recipients who were allegedly overpaid JobSeeker payments.
Furthermore, Centrelink has issued debt letters to 12,000 Aussies ordering them to pay back debts worth a combined $32.8 million.
These debts were raised because when it was discovered that some Australians had received JobKeeper and JobSeeker at the same time, which was not permitted.
Over 20 major companies have already announced that they intent to return a portion of the JobKeeper payments that they received. These companies include; SEEK, Nick Scali, Super Retail Group, Dominos, Domain, and many others.
Covid Disaster Payments In NSW and ACT Have Been Discontinued
Residents of NSW and the ACT who have been receiving Covid-19 Disaster Payments have been told that their payments were officially discontinued on Friday 8th October. The discontinuation comes as the two jurisdictions both reached the 70 percent vaccination threshold target.
In an update made on Friday 8th October, Services Australia confirmed that the payments have automatically “stopped”, with recipients now required to apply every week to claim the $750 payments.
The ACT hit its 70 percent fully vaccinated threshold on 8th October, while NSW hit it on 7th October.
The Federal Government announced the changes to the distribution of Covid-19 Disaster Payments back in late September 2021.
“These Covid disaster payments, these business support payments have been emergency payments and we can’t continue them forever, nor can we continue lockdowns forever. If you look abroad, the United Kingdom, Canada, the United States – countries are starting to live with Covid,” said Federal Treasurer Josh Frydenberg back in September.
Over the past few weeks close to 1.7 million Australians living across Victoria, NSW and ACT have been receiving the payments during recent lockdowns.
“People whose income is still affected may still be eligible for the COVID-19 Disaster Payment. “Claiming online, through myGov, remains the quickest and easiest way to claim –more than 90 per cent of claims are made online and some claims are processed within hours,” said Federal Minister for Government Services Linda Reynolds in a statement to the media on Thursday 7th October.
Most people in Greater Sydney and NSW will have received their last automatic payment at the beginning of the week and will be able to claim from 10th October.
People living in the inner suburbs of Sydney should have received their final automatic payment on 7th October and will be able to claim from 14th October, while those who are receiving Centrelink top-up payments can claim from 18th October.
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 1300 1 VAULT (1300 182 858)
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