ATO threat to hit rorters with double fines
Australians rorting early release of superannuation payments could face fines of up to $25,000 for making false and misleading claims to the Australian Taxation Office.
The ATO told NCA Newswire fund members who lodged two applications for early withdrawals without meeting the scheme's requirements could face separate financial penalties of up to $12,600 on each respective claim.
Double-dipping account holders who lied about financial stress induced by COVID-19 could be fined a maximum penalty of $25,200, if the ATO deems the applications to be false and misleading.
Early superannuation requests were implemented in April by the federal government as a financial assistance measure to support Australians who had become unemployed or experienced a reduction in income.
It allows an account holder to request up to $10,000 in both the 2020 and 2021 financial years.
The ATO said penalties ranged from $4000 to more than $12,000 for each false and misleading statement, with the imposition of fines considered on a case-by-case basis.
"Only in serious cases where an applicant has deliberately applied knowing that they were not eligible will we apply penalties," an ATO spokesman said.
"In these circumstances, amounts paid under COVID-19 early release of superannuation will become assessable income and need to be included in the individual's tax return and tax paid on the released amount."
The ATO has set up a special task force to crack down on people rorting coronavirus support measures, such as early release of superannuation and JobKeeper payments.
Research released by Illion and Accenture's AlphaBeta division in June shows 40 per cent of withdrawal requests made to the ATO did not meet the scheme's hardship requirements.
According to weekly figures published by the Australian Prudential Regulation Authority, as of July 26, $30.7 billion was expected to be sapped by nearly four million requests, with one million of those claims from people who had made repeat applications in the second tranche.
The federal government is forecasting about $42 billion will be siphoned from Australia's near $3 trillion superannuation sector. Its latest estimates are $15 billion higher than what it had initially anticipated.
A survey conducted by RateCity shows 67 per cent of respondents are planning to access more of their superannuation this financial year.
RateCity's study found half of the fund withdrawn were spent on paying household bills and a further 36 per cent of funds were used to buy essential goods and services, such as groceries.
Thirty-four per cent of respondents had used super money to pay down personal loans and credit card debts, while 6 per cent of people had spent some of the funds on alcohol.
"Access to this scheme was deliberately made simple to speed up the process, and it's possible some people withdrew their super when they weren't actually eligible," RateCity research director Sally Tindall said.
"The ATO is reviewing applications they suspect don't meet the criteria, so now is the perfect time to own up if you think you made a mistake."
Ms Tindal said accessing $20,000 of superannuation through the hardship scheme would cost a 30-year-old $43,032 in lost retirement income.
Originally published as ATO threat to hit rorters with double fines