The agencies insist it's perfectly legal. The tax office isn't so sure
The Australian Tax Office is investigating real estate agencies that have been accused of “double dipping” millions of dollars in JobKeeper payments by forcing their agents to repay the taxpayer-funded subsidy, according to a report by The Guardian.
The practice involves real estate agencies forcing agents to repay JobKeeper out of their commissions so that employers keep the benefits of the program. The Real Estate Employers Federation has told its 1,700 members that the practice is legal. Bryan Wilcox, chief executive of the federation, told Guardian Australia that the practice was “absolutely not” unethical and denied that it amounted to double-dipping.
“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,” Wilcox said.
Read more: How mortgage brokers could be able to access JobKeeper payments
But the ATO said that it was scrutinizing schemes to claw back wages payments and warned that there were consequences for making false JobKeeper claims. The agency said that it could 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.”
Labor frontbencher Andrew Leigh blasted the practice, saying JobKeeper was meant to support employees, not company owners.
“Yet some real estate employers seem to think it’s okay to claw back JobKeeper from their workforce,” Leigh 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.”
Unsurprisingly, agents also outraged by the practice, and have flooded the ATO with inquiries about employers clawing back the JobKeeper payment under an arrangement called “debit/credit” – an arrangement common in the real estate sector.
Under the arrangement, a sales agent is paid a regular wage, and is also entitled to a commission – but only after they have earned enough to pay back their own wage. About two-thirds of agents outside Western Australia and Queensland are employed under debit/credit contracts, while commission-only arrangements are more common in WA and Queensland, according to The Guardian.
Former Labor MP Ralph Clarke, who is now an industrial adviser who represents real estate agents in conflict with their companies, told Guardian Australia that a large number of agencies, employing thousands of people, had decided to include JobKeeper payments in the figure clawed back under debit/credit arrangements.
Through September, companies were subsidised $1,500 per fortnight for each employee retained through JobKeeper. That amount was then reduced to $1,200 per fortnight, and is set to drop to $1,000 per 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 told The Guardian. “So it’s double-dipping.”
Clarke said that while not every real estate company was clawing back the subsidy, the practice was “widespread.”
