In order to protect the Belgian economy as much as possible against permanent damage, both the federal and Flemish governments took various support measures. In this way, financial support was and still is offered to self-employed individuals and companies suffering from the corona crisis. A significant part of this support, however, ends up with entrepreneurs and companies that do not need it at all or that deliberately lie to collect premiums.
Misuse of support measures
An estimated 10 to 15% of the government support is misused; this support ends up in the criminal environment, in the hands of fraudsters or with companies that were already on the verge of bankruptcy before the crisis. Support was applied for by front companies for other criminal activities or dormant companies without real economic activity.
Many of these support measures are highly susceptible to misuse as their application and allocation takes place without too much control. For example, there is the bridging right, where a replacement income of up to 1,614 euros can be granted to self-employed individuals who had to close due to circumstances. The check upon application was limited to an identity and address data check. Further supporting documents to substantiate the application were not required. This was partly a deliberate choice by the government to avoid massive bankruptcies and dismissals. It is, however, difficult to check whether self-employed individuals who declare they had to close their doors due to corona are nonetheless continuing to work.
In addition, Flemish support measures such as the compensation premium are also being misused. This premium of 3,000 euros was granted to companies that recorded a drop in turnover of at least 60%. It happened on a massive scale that invoices were simply postponed to be able to demonstrate this loss. In this way, the compensation premium was granted to companies that were not entitled to it.
Criminal consequences
Misuse of support measures does not, however, remain without criminal consequences; this is evident from the arrests of 25 people on 15 December 2020 in an investigation into fraud with corona benefits. The fraud was committed by misusing the identity of hundreds of people or by applying for corona benefits in their own name while they were not entitled to them. The damage to social security is estimated at 2 million euros.
VLAIO has already announced the expansion of its inspection team from 15 to 30 staff members. They can check and reclaim subsidies for up to 5 years after payment. It is therefore recommended to safely keep proofs of closure or inactivity for 5 years after the payment of a premium.
Furthermore, unjustified applications are also penalised under criminal law. Subsidy fraud is punishable by fines of up to 800,000 euros and prison sentences of up to 5 years. Deliberately incorrect or incomplete statements are also punishable by a fine of up to 50,000 euros and a prison sentence of up to 3 years.
Have you applied for support measures and are you faced with an inspection by government services? Click here to contact us for assistance.