‘Another Robodebt’ fiasco: ServiceNSW chasing money it never paid

During the pandemic, ServiceNSW was throwing money out the door - but an audit of grant recipients has been targeting people who never applied for or received funding.

ServiceNSW contractors have been demanding small businesses and sole traders repay money they never received, while shaking down thousands of people who wrongly received Covid grants due to the agency’s own failings.

Under the Minns government, a servicensw compliance program has audited tens of thousands of businesses who received “micro-business support payments” since the 2021 lockdown, clawing back $13.2 million.

Businesses were eligible for the $1,500 fortnightly payments if they had a turnover of between $30,000 and $75,000 in the 2019-20 financial year, and had suffered a 30 per cent decline turnover.

However, The Daily Telegraph can reveal that sole traders who never applied for nor received the grants were targeted in the compliance crackdown.

One sole trader from Kingsford, who spoke on the condition of anonymity, said he got a call “out of the blue” earlier this year, demanding that he repay more than $10,000 in Micro-Business grants which he never received.

ServiceNSW has clawed back $13.2 million in Micro-Business grants it said were wrongly handed out. Picture: NCA NewsWire / Damian Shaw

He said he was called or emailed “more than 20 times” about the alleged debt.

ServiceNSW ended up dropping the case, after he repeatedly asked for evidence that he had money to repay.

He said that he could understand if people were intimidated into paying back money they did not owe.

The compliance action targeted people who never applied for nor received government funding. Picture: NCA NewsWire / Damian Shaw

“A feeling of guilt wells up in you, every few days you’d get a call from a different person saying ‘you really don’t want us to refer the matter on’,” he said.

Meanwhile, 2300 microbusinesses who were given money they never should have received have now been told they need to repay the grants.

When the compliance crackdown discovered the payments had been wrongly made, contractors and ServiceNSW staff started demanding it be repaid.

The audit on Micro-Business grants was launched in 2022 under the Minns government. Picture: Richard Dobson

One woman received $15,000 in grant money from ServiceNSW even though she was not eligible for the funding.

The woman, who did not want to be identified, did not meet the minimum turnover threshold, which she said she told ServiceNSW at the time.

“I was told there was no issue with my application at all,” she said.

Opposition Digital spokesman James Griffin blamed budget cuts to ServiceNSW for the agency targeting the wrong businesses. Picture: NCA Newswire / Gaye Gerard

She was targeted in the compliance crackdown, with ServiceNSW demanding she repay the funds.

“The whole thing has been another robodebt rort recovery situation,” she said.

Her debt was eventually “excused” due to hardship, after she provided a letter from her doctor.

Another sole trader targeted by the audit was eventually cleared, but only after spending hundreds of dollars on accountants fees to prove her eligibility.

Opposition Digital spokesman James Griffin blamed budget cuts for the shambolic audit process.

“These demands from ServiceNSW would make the Grinch blush,” he said.

“Chris Minns needs to step in here and make sure his government doesn’t crush the Christmas dreams of hardworking small business owners across NSW,” Mr Griffin said.

In a statement, a ServiceNSW spokeswoman said the compliance checks identified “23,000 fraudulent applications and prevented more than $52 million in suspected fraud”.

“As at 30 November 2024, 896 charges have been laid and 209 individuals have been convicted of fraud.”

The compliance crackdown was launched in 2022 and ramped up under the Minns government.

A spokeswoman said the new government changed the rules to allow for debts to be waived for hardship reasons

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Originally published as ‘Another Robodebt’ fiasco: ServiceNSW chasing money it never paid