Revealed: Government reveals how many have been prosecuted for wage subsidy fraud

Finance Minister Grant Robertson during his announcement over the wage subsidy scheme extension on August 17, 2020. Photo / Mark Mitchell

Not a single case of wage subsidy fraud has been referred for prosecution, despite the fact the Government received almost 4500 complaints related to the system being gamed.

And, as of late November, some $525 million wage subsidy payments have been returned to the Government by 17,401 companies, businesses and individuals.

This is good news, according to Finance Minister Grant Robertson.

Although he wouldn't comment on the fact there have been no prosecutions, he said he considers that half a billion dollars being paid back was "a success".

Figures from the Ministry of Social Development (MSD) reveal that there have been 4478 complaints about the wage subsidy since it came into force.

These include workers who suspected their boss was taking the subsidy when they didn't need it, or suspicions that their employer was gaming the system.

Of those complaints, 973 were referred to for an investigation with 354 still under investigation.

But the MSD figures show not a single case has been referred to for prosecution.

"Any decision on prosecution will come after a thorough investigation and weighing of the evidentiary basis for a prosecution," MSD said in response to an Official Information Act (OIA) request.

Close to $14b was paid out through the wage subsidy scheme to 1.76 million people.

Overall, 62 per cent of jobs – excluding sole traders – were supported by at least one wage subsidy, according to MSD figures.

In late April, Robertson revealed that the Government had a team of 100 auditors combing through the financial returns of the businesses which claimed the subsidy for evidence of fraud.

He said those found to be in breach could face criminal prosecution and face a seven-year jail sentence.

"Everyone who has taken money from the wage subsidy scheme needs to know that our audit teams will be looking across the full suite of applications," he told media at the time.

He said the Government owed it to workers and employers to make sure their good work was not being undermined by anyone abusing the scheme.

"We have a duty to all New Zealanders to ensure taxpayer money is going where it is intended to support the economy.

"If a business provides false or misleading information and knowingly commits a crime, they will held to account. That's a given."

Wage subsidy timeline:

• March 17, 2020: The wage subsidy opened for applications from employers who experienced at least a 30 per cent decline in revenue due to Covid-19.
• June 9: The wage subsidy closed.
• June 10: The wage subsidy extension opened for applications from employers who experienced at least a 40 per cent decline in revenue due to Covid-19.
• August 21: The resurgence wage subsidy opened for applications from employers who experienced at least a 40 per cent decline in revenue due to Covid-19.
• September 1: The wage subsidy extension closed.
• September 3: The resurgence wage subsidy closed.