Aussies who rorted super early release scheme face $25,000 fines
Were you among the estimated 2.5 million people to withdraw money from your super due to COVID-19?
In order to speed up payments the tax office did not screen applications - some people who were not eligible have obtained payment. Now the ATO is tracking those people down.
You can still request an early release of your super up to September 30, but you need to meet one of the following criteria to qualify:
- You are unemployed.
- You are eligible for JobSeeker or other benefits.
- On or after January 1, 2020, either: you were made redundant; your working hours were reduced by 20% or more; or if you were a sole trader your business was suspended or there was a reduction in your turnover of 20% or more.
The ATO is now checking applications. If it identifies you weren't eligible (for instance, by matching payroll information from your employer with your application), it will revoke your permission to withdraw.
You won't need to repay it - in fact, the ATO won't let you - but you will be taxed on the amount. You'll need to include the amount in your tax return and pay tax on it at your marginal rate.
Guidance issued by the ATO suggests it will pursue everyone who withdrew money without being eligible.
As well as taxing the withdrawals, it will also apply penalties where someone has made a false or misleading statement to access their super.
People who have applied for early release without meeting the necessary requirements could face fines of up to $12,600 for each application. The maximum penalty for making two ineligible withdrawals is $25,200.
About one million Australians accessed their super under both rounds of early release.
The ATO has so far contacted about 5000 people who accessed their super before June 30 and warned them to review their eligibility before applying for the second round.
We're cutting through the confusion to help you manage your money during the coronavirus outbreak. Click here for more on how COVID-19 could affect your job, budget, super and investments.