Businesses in NSW that have received micro business grants beware. Service NSW and the NSW police have formed a joint taskforce to investigate “fraudulent applications”. Additionally, in response to anomalous applications discovered late October, Service NSW had temporarily paused payments to some recipients on 1 November, although it claims that recurring payments for existing applicants have now resumed. According to Service NSW, it has investigated around $15.9m worth of fraudulent micro business grant applications, equating to 2.6% of all paid applications.
Micro businesses in NSW that met aggregated annual turnover and other eligibility conditions were eligible for the 2021 COVID-19 micro-business grant if they were impacted by COVID-19 restrictions. Whilst application for the grant has closed, and current recipients are due to have their last payment on 30 November 2021, Service NSW temporarily paused payments on 1 November to some recipients to allow additional analysis and assessments to be carried out in response to “increased fraud activity”.
By way of background, the grant originally consisted of fortnightly payments of $1,500 that was available to eligible small businesses, sole traders, and not-for-profit organisations. The payment was dropped to $750 per fortnight on 30 October 2021 when NSW reached the 80% double vaccination milestone. To be eligible, businesses must have met the following criteria:
- have an active ABN or demonstrate that the business was primarily operating in NSW as at 1 June 2021;
- aggregated annual of between $30,000 and $75,000 for the year ended 30 June 2020;
- experienced decline in turnover of 30% or more due to the public health order over a minimum 2-week period (commencing 26 June 2021) compared to either, the same period in 2019, or the same period in 2020, or the 2 weeks immediately prior to any restrictions (ie 12 June to 25 June 2021);
- have business costs for which no other government support is available;
- have not applied for either the 2021 COVID-19 business grant or the JobSaver payment;
- maintain employee headcount from 13 July 2021 (for employing businesses); and
- the business must be your primary income source (ie 50% or more of total income), if you’re a non-employing business (ie sole trader).
However, some businesses (ie those earning primarily passive income) or not-for-profit organisations that could not meet all of the above eligibility criteria could have applied for the grant through the hardship review pathway. In addition, micro businesses that did not meet the eligibility criteria due to not operating for the full year, or have been affected by natural disasters or illness of the main operator may also have been able to apply alternative rules to have qualified for the payment.
In response to the increased fraud activity, the NSW police, in conjunction with Service NSW, has established Strikeforce Sainsbery to investigate fraudulent applications for COVID-19 business support payments. According to Service NSW CEO, Damon Rees, fraud and compliance investigators identified anomalies in some applications made for the 2021 COVID-19 micro-business grant in late October, the payments were then paused temporarily to investigate the anomalies.
“Recurring payments for existing applicants have now resumed with 7,500 applications processed overnight with the majority of eligible payments expected to restart in the coming week.” – Damon Rees
Thus far, Service NSW claimed to have investigated around $15.9m worth of fraudulent 2021 COVID-19 micro business grant applications which equates to around 2.6% of all paid applications. A further $4.6m in suspected fraud was stopped before it was paid and there will be ongoing work to detect and investigate suspected fraudulent applications across all programs. The NSW police will contribute to this investigation by using “state-of-the-art artificial intelligence system designed to mass analyse and cross-reference metadata”.
If your micro business has been caught up in this investigation in error, we can help you contact the relevant department for assistance and help speed up the processing of your legitimate grant application. We can also help with clearly documenting and evidencing your eligibility to the micro business and other grants and payments to ward against any future investigation.