Victorian businesses forced to repay $3.1 million in state government grants, after administrative error

Hundreds of small businesses in Victoria have been asked to pay back coronavirus cash grants due to an administrative error made by the state government.

The cash grants were given to thousands of hospitality businesses affected by the state’s prolonged lockdown as part of the $251 million Licenced Hospitality Venue Fund.

As first reported by 9News, more than $3.1 million worth of grants were incorrectly paid to 293 licenced venues that applied for support during the height of the pandemic.

Jaci Hicken, owner of Gippsland cooking school Jacican, tells SmartCompany she was told she had to pay back the entire $20,000 grant she received.

“I got a phone call on Monday from Business Victoria. It almost sounded like a scam,” Hicken says.

Following the phone call, Jaci received an email from the Department of Jobs, Precincts and Regions requesting the $20,000 be repaid by February 16.

“If I paid back the grant on the day I received the email, there would have been $86 left in my account,” she says.

The $251 million Licensed Hospitality Venue Fund program was established to support eligible liquor licensees with hospitality venues affected by coronavirus restrictions.

Grants of up to $30,000 were available to eligible businesses based on the location of their venue and capacity.

In late-December, the administrative error resulted in some successful Licensed Hospitality Venue Fund applicants being overpaid, a government spokesperson said.

“These recipients have been asked to repay the overpayment amount, in line with the department’s legal obligations,” the spokesperson said in a statement.

“The department apologises for the inconvenience caused to recipients.”

Jaci says it is frustrating to have to pay back the grant because of an administrative error, particularly because she had already spent most of the grant on insurance expenses.

The cooking school is located in Mirboo North in Gippsland and offers classes to the public which celebrate regional Gippsland produce.

Jaci says she operates the business from a small 45-square-metre space and due to social distancing guidelines, it has not been feasible for her to offer indoor classes. Since the pandemic began, Jaci has been running her classes from an outdoor marquee.

“It’s stressful. It means I’ll probably have to close the business once the weather changes because we won’t be able to finish the entertaining outdoor dining area properly,” she says.

Businesses have been asked to repay their grants by February 16 and recipients experiencing financial hardship can request a payment plan.