Finance Your Super Tax office reviewing more than 1900 early superannuation withdrawals

Tax office reviewing more than 1900 early superannuation withdrawals

The ATO is reviewing more than 1900 early superannuation withdrawals. Photo: TND
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The Australian Taxation Office is reviewing the eligibility of more than 1900 early superannuation withdrawals.

Responding to questions posed by The New Daily before the pandemic support measure ended on December 31, the ATO has revealed it estimates between 2 and 4 per cent of the scheme’s applicants failed to meet the strict eligibility criteria

But it said it understands some applicants may have made a genuine mistake. 

“In this instance, the ATO will work with them to help resolve their situation,” a spokesperson said in a written statement.

“Only in serious cases where an applicant has deliberately applied, knowing they were not eligible, will the ATO consider applying penalties.”

The spokesperson said the ATO has imposed no financial penalties, as most ineligible applications were the result of “genuine errors or misunderstanding of eligibility, rather than attempts to breach the rules”.

In addition to the ATO reviewing more than 1900 applications, about 1700 taxpayers have voluntarily disclosed to the ATO that they may have breached the scheme’s criteria. 

The revelations come after shadow assistant treasurer Dr Andrew Leigh unofficially complained to the ATO about recent comments made by Liberal MP Tim Wilson.

Days before the scheme was closed to further applications on December 31, Mr Wilson encouraged Australians on Twitter to withdraw money under the scheme and put it towards a housing deposit. 

Dr Leigh responded by asking the ATO on Twitter whether Mr Wilson was “encouraging people to break the law by accessing super to buy a home”. 

“[The tweet] was a suggestion that people use the money in order to break into the housing market,” Dr Leigh told The New Daily on Tuesday.

“That’s not the reason why early release super was designed.”

Asked whether Mr Wilson’s tweet was encouraging people to break the law, an ATO spokesperson told The New Daily “as long as the applicant meets the eligibility criteria, they can access their superannuation under the temporary early release of superannuation program”. 

The second phase of the scheme, which ran from July 1 until December 31, was available to citizens or permanent residents of Australia or New Zealand who met one of the following criteria:

  • Were unemployed
  • Were receiving JobSeeker, Youth Allowance, Parenting payment, Special Benefit or Farm Household Allowance
  • Were made redundant, had their working hours reduced by at least 20 per cent, or saw their turnover as a sole trader fall by at least 20 per cent on or after January 1, 2020.

The latest available data from the Australian Prudential Regulation Authority reveals that Australians had withdrawn $35.8 billion under the scheme as of December 13.

That is much more than the $29.5 billion Treasury initially forecast, but less than the $42 billion it had anticipated in July.

Nevertheless, the ATO has come under heavy criticism from industry and Labor MPs for not conducting income checks before granting access to the scheme, which is based on self-assessment.

The New Daily is owned by Industry Super Holdings