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Wage Subsidy Integrity and Fraud Programme

About the Wage Subsidy Integrity and Fraud Programme

The Wage Subsidy was a high-trust scheme providing rapid payments up front to businesses affected by COVID-19 restrictions so that employers could continue to pay their employees. The aim was to help prevent job losses and business closures, and employers undertook to pass payments on to staff in wages.

About $18.8 billion was delivered in 2020 and 2021 for wages for more than 1.8 million jobs. Overall 47 per cent of New Zealand jobs, excluding sole traders, were covered by at least one of the 2021 wage subsidies.

Two years later MSD has a substantial continuing work programme aimed at providing assurance that those who received payments were entitled to them.

While in the vast majority of cases, employers have done the right thing and met eligibility criteria for the wage subsidy, or have repaid their wage subsidy, in some cases employers received wage subsidy they weren’t entitled to.

Our programme of work includes investigations, post-payment checks, requests for repayment, civil recovery, and in the more serious cases, prosecutions where there is evidence deliberate fraud was involved.

We have engaged with tens of thousands of applicants since the scheme began, and as a result repayments continue to come in.

We’ve been assisted by the high degree of transparency in the wage subsidy scheme, with an online tool that provides an up-to-date account of payments made to employers, net of any repayments. This has provided additional assurance, allowing employees and other members of the public to question payments or to lay complaints.

Our assurance work is part of actions in response to the May 2021 report of the Office of the Auditor General.

As of 9 February 2024 there has been:

  • 24,990 repayments of taxpayers’ funds have been made, totalling $824 million
  • 15,687 pre-payment and post-payment checks on wage subsidy applications have been made (as of 31 December 2023)
  • 7,461 allegations of wage subsidy misuse have been resolved (as of 31 December 2023)
  • 44 people have been brought before the courts for wage subsidy misuse, in relation to more than $3 million in subsidy payments.
  • 45 businesses have civil recovery action underway against them to recover payments
  • 11 cases of significant and complex alleged wage subsidy fraud have been referred to the Serious Fraud Office.

Wage Subsidy repayments

The Top 10 Employer Repayments for Covid-19 Wage Subsidy

Wage subsidy repayments

Note: As at 30 June 2023; these repayments above were voluntary

Questions and answers

Are employers required to repay wage subsidy funds if they made a profit in the year they received a subsidy?

Eligibility was based on a real or predicted decline in revenue at the time of their application. Profits that employers may have gone on to make after receiving the wage subsidy do not affect their eligibility. The Ministry has no powers to recoup wage subsidy payments that applicants were eligible to receive. However many employers have chosen to make repayments in this situation, which we welcome.

Is it correct that there are $10b in overpayments to employers ?

No. We know of no reasonable basis for such claims, which appear to be based on a misunderstanding of eligibility criteria for wage subsidy.

Media releases

MSD rejects Integrity Institute claims

3 July 2023

We reject the Integrity Institute’s misleading $10 billion “overpayment” claim and can see no reasonable basis for making it, says George Van Ooyen, MSD’s Group General Manager – Client Service Support.

Super Rugby player wage subsidies

17 July 2023

We have been engaging with 17 entities associated with 14 provincial rugby unions that claimed a combined total of $9,719,935.60 on behalf of Super Rugby players through the Wage Subsidy, Wage Subsidy Extension, Wage Subsidy Resurgence and Wage Subsidy August 2021 schemes.

Wage Subsidy cases in the courts

MSD is committed to pursuing criminal and civil prosecutions to recover wage subsidy funds where necessary.

We have a pipeline of Wage Subsidy cases that are currently before the courts. Here are the cases we have taken through the courts to sentencing in recent months.