If you have only read the mainstream media recently, you can think the COVID-19 stimulus measures are straightforward benefit payments which will hit your bank account with little fuss or effort.
After reading so many good news stories in the paper, some of you may feel cheated, particularly sole traders who cannot access the big-ticket Cash Flow Boost. You may have even considered steps to inflate your benefit entitlement or get creative with your eligibility.
Proceed with caution— what is not being commonly reported outside of accounting circles is the confusing eligibility criteria of the stimulus benefits, the strict integrity measures and the penalty regimes for those caught doing the wrong thing.
Need to Know Integrity Measures
JobKeeper payments
The JobKeeper payment comes with hefty integrity measures.
At the lower end, those making false statements to obtain the payment will suffer financial penalties of up to 75% of the benefit. At the extreme, those proven to have conspired to defraud are liable for prosecution under the criminal code with maximum 10-year imprisonment.
The integrity measures for JobKeeper are designed to ensure:
Proper eligibility and avoidance of double payments
Payments are reaching workers in full
Reporting and record-keeping carried out appropriately
Those undertaking contrived schemes will be penalised
Given the massive size of this stimulus package, the government have openly stated that they will be actively implementing integrity measures and acting swiftly to take action where required.
Cash Flow Boost
Entities that create an artificial entitlement to maximise the Cash Flow Boost may be disqualified from receiving any amount of the payment and be subject to high interest and penalties.
Examples of creating an artificial entitlement may be:
Registering for Pay as You Go Withholding and commencing to pay wages to the owners of the business (who have not previously drawn wages)
Artificially increasing wages or paying one-off large bonuses/director fees
Employing children and family members in the business for the first time
Who should you trust?
An experienced accountant, one who you trust, is your best guide to navigate the stimulus benefits and avoid the integrity traps. Don’t rely on the advice presented in the media or by acquaintances to be correct and applicable to you.
Tips for taking advice on these benefits
1. Engage your accountant to review your eligibility and provide a response to you in writing
2. Keep evidence and documentation of your eligibility (e.g. reduction of turnover) 3. Know your ongoing reporting obligations and commit to them
4. Give any advice you receive the “smell test” – if it seems off or too good to be true seek a professional opinion (revert to step 1 above)
The stimulus measures help to keep Australian business going and keep workers engaged.
Don’t risk your business cash flow or compliance history by taking poor advice or engaging in risky plays.
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