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 said, as at 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 $3.95m.
Questionable claims for substantial subsidies from within some business sectors has sparked concern the scheme is open to abuse.
Companies and 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 the decrease is Covid-19 related.
MSD 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 at April 20 the total of wage subsidies paid out was $10.213b. Total applications at that time were 519,788.
Of those, 410,984 had been approved and 30,819 declined. Pending were 9474 and 68,511 were closed. MSD said applications were considered closed when the applicant appeared to have made an error in their submission.
Russell said the Government had made it clear 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 about 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.
MSD had an audit process to identify cases that may require further investigation.
Random audits are 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. MSD 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 if they have provided false or misleading information; failed to meet any of the obligations about how to use the subsidy; or received any subsidy or part of a subsidy they were not entitled to," Russell said.
Asked if proof of solvency was required at time of application, Russell said that was not part of the criteria of this policy.
She said there would always be a small minority who don't do the right thing.
Complaints could be made through MBIE, an employee with concerns about a particular employer could make a complaint with Employment NZ, and through MSD, if someone wanted to make an allegation of wage subsidy fraud.
"As part of the wage subsidy application process the Ministry matches information in the wage subsidy application with information held by Inland Revenue. We also retrospectively audit samples of those who have applied and been paid the subsidy."
• Covid19.govt.nz: The Government's official Covid-19 advisory website
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