Thousands of JobKeeper applications rejected over fraud or ineligibility

At least 6500 Australians have been knocked back from receiving JobKeeper payments with the tax office citing fraud or ineligibility.

Thousands of Australians have had their applications for JobKeeper payments rejected by the Australian Taxation Office due to ineligibility or fraud.

Last month the ATO issued a stern warning that those caught deliberately trying to flout the system could be hit with financial penalties, prosecution or even jail time.

“We’ve received intelligence about a number of dodgy schemes, including the withdrawal of money from superannuation and re-contributing it to get a tax deduction,” ATO deputy commissioner Will Day said in a statement posted to the government website last month.

“Not only is this not in the spirit of the measure, which is designed to assist those experiencing hardship, severe penalties can be applied to tax avoidance schemes or those found to be breaking the law.

The queue outside the Southport Centrelink as people try to register for JobKeeper. Picture Glenn Hampson

The ATO told ABC News it had knocked back 6500 applications since the scheme was launched in March and had 3000 staff reviewing JobKeeper bids on top of other COVID-19-related stimulus packages.

So far the Government’s $70 billion JobKeeper scheme, which offers laid-off Aussies $1500 a fortnight in wage relief, has been accessed by more than 3.3 million people from close to 900,000 businesses.

The news comes as the Morrison Government prepares to make changes to the scheme, which is due to end in September and can no longer be accessed by childcare workers from July.

The scheme is being reviewed by Treasury, and the results will be made public towards the end of the month. Treasurer Josh Frydenberg has not ruled out other changes that could see other industries face a similar fate to the childcare sector.

“We will be looking to see how to strengthen and improve that program,” Mr Frydenberg told reporters in June.

It is understood the ATO has delivered about $13 billion in JobKeeper payments so far.

Treasurer Josh Frydenberg has not ruled out further changes to JobKeeper. Picture: AAP Image/Lukas Coch

An ATO spokesperson said the team was reviewing between 2 and 3 per cent of applications, and those intentionally defrauding the system would be punished.

Australians have been rejected for several reasons, from making accidental errors to fraudulent behaviour. The spokesperson also noted the ATO had issued letters to 8000 businesses informing them they may have to repay JobKeeper money because they haven’t supplied the correct paperwork.

“The ATO will work with business owners to avoid and overcome honest mistakes,” the spokesperson said.

The tax office is also encouraging Australians to make a tip-off if they detect fraudulent behaviour.

“We are committed to tackling illegal activity and behaviour of concern, especially when it comes to COVID-19 or JobKeeper, phoenix, black economy and tax evasion to protect honest businesses and the community,” the tax department said in a statement.

“Making a tip-off is not just limited to tax issues – we want to hear when someone is gaining a competitive advantage over those who are doing the right thing. If you are concerned that you or someone you know is doing the wrong thing, you can tell us about it.”

Meanwhile, the Australian Federal Police revealed yesterday it had frozen $200,000 across more than 50 bank accounts suspected of defrauding the Government’s early super access scheme.

The initiative allows Australians suffering financial hardship to withdraw $10,000 from their superannuation fund until September 24.