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Real estate agencies are under scrutiny by the Taxation Office after being accused of “double dipping” millions of dollars in jobkeeper payments by forcing sales agents to repay the taxpayer-funded subsidy.
The Real Estate Employers Federation has given its 1,700 members legal advice that the practice, in which agents repay jobkeeper out of their commissions so that employers keep the benefit of the subsidy, is perfectly legal.
The federation’s chief executive, Bryan Wilcox, denied it amounted to double dipping and said it was “absolutely not” unethical.
“I think it would be negligent to say to someone, you should do this because of some moral position, because the alternative might be they shut their doors,” he told Guardian Australia.
However, the Taxation Office said schemes to claw back wages payments were in its sights and warned there were penalties for making false jobkeeper claims. It said it could also refer cases to the Fair Work Ombudsman.
“Under jobkeeper, the obligation is to pay employees the minimum wage condition, being the amount of jobkeeper claimed by the employer for the employee,” an ATO spokeswoman told the Guardian.
“If we identify contrived arrangements where employers seek to claw back the wages they have paid to employees, we will consider application of our scheme provisions and there are penalties for entering into schemes.”
It comes after controversy over executive bonuses and payments to shareholders that have been fuelled by jobkeeper money.
Labor frontbencher Andrew Leigh said jobkeeper was meant to support workers, not company owners.
“Yet some real estate employers seem to think it’s OK to claw back jobkeeper from their workforce,” he said.
“The Morrison government needs to explain why they’re letting business owners exploit this loophole. And firms need to understand that this is a taxpayer subsidy to help workers, not free cash to play with as they please.”
The practice has also sparked outrage among agents, who have flooded the Taxation Office’s community noticeboard with questions about employers clawing the jobkeeper payment back from them under an employment arrangement called “debit/credit” that is extremely common in the real estate industry.
Under a debit/credit contract, a sales agent is paid a regular wage. They are also entitled to commissions, but only after they have earned enough of them to pay back their own wage.
About two-thirds of agents outside Western Australia and Queensland are employed on debit/credit contracts. Deals where only commissions are paid are more common in WA and Queensland.
Industrial adviser Ralph Clarke, a former Labor MP in South Australia who specialises in representing real estate agents in fights with their bosses, raised concerns about the practice in a May submission to federal parliament’s Covid-19 oversight committee.
He told Guardian Australia a large number of agencies, employing thousands of people, had decided to include some or all jobkeeper amounts in the wages figure clawed back from commissions under debit/credit arrangements.
Until the end of September, bosses were subsidised $1,500 a fortnight for each employee kept on through jobkeeper. The amount has now reduced to a maximum of $1200 a fortnight and is to shrink again, to $1,000 a fortnight, in January.
“The boss has got $1,500 from the taxpayers, then they can claw it back from the agent’s future commissions,” Clarke said. “So it’s double dipping.”
He said not every real estate company was clawing back jobkeeper but the practice was “widespread”.
One real estate agent from South Australia said her employer ate up more than $7,000 in commissions owed to her by charging her for jobkeeper payments.
“They were advised they could get away with it, so they did,” she said. “They robbed me of $7,000. I would have been better off on jobkeeper – and I wouldn’t have had to pay it back.”
An agent from WA told the Guardian he was guaranteed $1,000 a fortnight in pay from his employer, which was topped up to $1,500 a fortnight when jobkeeper was introduced.
“They were paying me $1,500 a fortnight and still recovering the $1,000 a fortnight because they were legally able to,” he said. “The way I saw it they were basically double dipping.
“I raised the ethical issue with my employer but they weren’t interested in the ethical issue – they were interested in the dollars. The way the whole thing was implemented left loopholes in the system and they’ve exploited that.
Wilcox said many employees “seem to think jobkeeper was a bonus for them”. However, it was in fact a payment for employers. “The boss gets the jobkeeper to help him pay the wages.”
Wilcox said bosses were entitled to claw back wages under debit/credit contracts and the fact employers were receiving jobkeeper payments did not change anything.
In addition to obtaining legal advice, the Real Estate Employers Federation beat Clarke in a Fair Work case in August where the industrial advocate had tried to get the award covering estate agents changed to eliminate the practice. Clarke was representing the Registered Real Estate Salesperson’s Association of South Australia in the case.
“It’s not double dipping,” Wilcox said. Not every real estate agency was debiting the full jobkeeper amount from commissions, he said.
“Some employers have said I’ll debit the difference [between usual wages and jobkeeper], some employers have said, ‘No, I’ve got other expenses to pay that go towards keeping you employed.’”
Wilcox said employee unhappiness over the clawbacks was “misplaced”.
“If they didn’t know the boss was getting jobkeeper, would they be unhappy? No.”
The ATO’s spokeswoman urged people with concerns to contact the organisation’s tipoff hotline.
“While most businesses and employees are doing the right thing, we have identified concerning and fraudulent behaviour and claims by a small number of organisations and employees,” she said.
“We will actively pursue these claims and there are penalties for making a false claim and not complying with your obligations.”
Source: The Guardian
Keyword: Real estate agencies accused of ‘double dipping’ millions of dollars in jobkeeper | Housing