Wage subsidy audits to protect business integrity

  • Hon Grant Robertson
  • Hon Carmel Sepuloni
Finance Social Development

The Government is protecting the integrity of New Zealand businesses correctly accessing the wage subsidy by prioritising the audit process for businesses where complaints have been laid.

A dedicated MSD investigations team is working with IRD and MBIE to ensure businesses using the scheme as intended are not undermined by the actions of a few, Finance Minister Grant Robertson and Social Development Minister Carmel Sepuloni say.

The scheme has paid out $10.4 billion to protect jobs and support the incomes of over 1.6 million New Zealanders. This has kept businesses connected to their workers during the lockdown, so they are in a good position to start up on the other side.

“We moved quickly to get support in place for businesses and workers early by designing a high-trust model for the wage subsidy to get money out the door,” Grant Robertson said.

“We knew the vast majority of New Zealand business owners would access the scheme as intended, to protect jobs, support workers’ wages and stay connected during the lockdown. It’s great to see these business owners doing right by their workers.

“We owe it to those workers and employers to make sure their good work isn’t undermined by anyone abusing the scheme. We also have a duty to all New Zealanders to ensure taxpayer money is going where it is intended to support the economy.”

From the start, applicants were told they would have to repay the subsidy if they provided false or misleading information in their application. They were also told they may be subject to civil proceedings for the recovery of any amount received that they were not entitled to, and/or prosecuted for offences under the Crimes Act 1961.

Assurance and audit processes put in place by MSD to support this work are overseen by a team of 104 fraud experts and investigators. The audit process will identify cases that may require investigation. So far:

  • MSD has completed 2,435 random and targeted audits. 2,252 of these have been resolved and additional reviews of 183 cases are being undertaken.
  • 292 allegations have been received. MSD has resolved 88 of these allegations, with the balance still being worked on. As at 20 April, 1,170 complaints and allegations had been received across MSD, MBIE and IRD.
  • As at 21 April, 1,281 applicants had voluntarily advised they want to refund all or part of the subsidy. This has led to $16.2m of refunds requested and $6.9m has already been refunded.
  • As at 21 April our auditing had resulted in 56 applicants being asked to refund either all or part of their subsidy. A total of $1.25m has been requested from these applicants with $168,000 already refunded.

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

“The vast majority of businesses are doing the right thing and don’t need to worry about the audit process,” Carmel Sepuloni said.

“For some businesses, circumstances change following receipt of the subsidy, including where insurance may have been received, or new revenue forecasts show the business won’t suffer a 30% drop. A number of businesses have come forward when this happens by offering to repay the subsidy, and we encourage any business who may have made a mistake to do the same.

“But New Zealand taxpayers and those who have accessed the scheme properly expect to see a fair process. If a business provides false or misleading information and knowingly commits a crime, they will held to account. That’s a given.”