Coronavirus: Employers who receive wage subsidy could commit fraud if they don't act in good faith

Employers who receive money from the COVID-19 wage subsidy scheme but don't keep their staff may be committing fraud.

Minister of Finance Grant Robertson says businesses take on a responsibility when they receive funds from the wage subsidy scheme, and there may be consequences for those who don't act in good faith.

"When businesses took on this responsibility of taking the wage subsidy scheme and supporting their workers, they signed a declaration. If they are not upholding that declaration, we have the ability to treat that as fraud," he said on Thursday.

He added that if they get the name of any business who may not be using the scheme money as intended, they will follow it up immediately.

All businesses, contractors and self-employed people are eligible for the scheme, and a total of $1.5 billion has been paid out so far, Robertson said.

That includes 244,887 workers from 72,913 applications who have been paid out, 111,898 applications have been approved and are about to be paid, and 47,434 are yet to be processed.

Businesses need to demonstrate a 30 percent loss of income as a result of COVID-19 in March 2020 compared to January 2020 in order to be eligible.

Self-employed people with variable monthly incomes are eligible if they can show a loss of revenue against the previous year's monthly income.

The payments initially had a limit of $150,000 per business, however that cap was completely lifted last week.

The expansion of the wage subsidy scheme took its estimated total cost to $9.3 billion.