ATO cracks down on dodgy applications for early release of super
People who withdraw money from their super fund without being eligible could face heavy fines, the tax office has warned.
The ATO has announced fines of up to $12,000 for anyone making false and misleading statements in order to withdraw $10,000 under the second round of the superannuation early release scheme.
This includes people who have accessed their super without losing 20% of their work hours or 20% of business turnover for sole traders, artificially arranging affairs, or making false statements to meet the ATO's withdrawal criteria.
About 2.5 million people applied for the early release of super last financial year, according to the Australian Prudential Regulation Authority, with an average withdrawal of $7503.
ATO Deputy Commissioner Will Day says that with so many Australians impacted by COVID-19, the tax office's priority is to ensure payments to people who need them.
"We've received intelligence about a number of dodgy schemes, including the withdrawal of money from superannuation and re-contributing it to get a tax deduction," Day says.
"Not only is this not in the spirit of the measure (which is designed to assist those experiencing hardship), severe penalties can be applied to tax avoidance schemes or those found to be breaking the law."
Day says that people who have received a benefit they are not eligible for should make a voluntary disclosure and, if they need more information, speak to a tax agent.
The ATO's Single Touch Payroll (STP) system provides the ATO with real-time information on who is employed and how much they are paid.
"Our compliance approach is based on ensuring that people have not exploited the measure. Where we have concerns that claims were not genuine we will review them," Day says
In one example shared by the ATO, a man who was receiving JobKeeper but had no change to working hours withdrew $10,000 from his super, believing that receiving JobKeeper made him eligible.
However, as JobKeeper isn't a qualifying government payment, the $10,000 from super will now be treated as assessable income and he will be required to pay tax on the released super amount.
The deadline to apply for the second round of early release is September 24.
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