The Australian Taxation Office is cracking down on workers who have made fraudulent applications to dip into their superannuation.
The ATO said it will be reviewing applicants who have:
- applied to access their retirement savings despite no cut to working hours or income.
- misled or made false statements to the ATO to meet the super withdrawal scheme’s eligibility criteria.
- withdrawn and re-contributed to super for tax benefits.
The taxman has already detected some cases of super withdrawal applicants doing the wrong thing. In some cases, the agency has prevented super funds from being taken out, while in other cases, it is investigating applications after the money has been accessed.
ATO deputy commissioner Will Day said some have been involved with “dodgy schemes” exploiting the superannuation tax offset by withdrawing money from their super fund and re-contributing it for a tax deduction.
Anyone found to be making inaccurate claims or breaking the law could face a fine of up to $12,600 or in extreme cases, prosecution.
Why the application doesn’t ask for proof
As Australia enters a COVID-19 induced recession, the government is supporting the economy by putting cash into the hands of coronavirus-affected Australians quickly. To make the super withdrawal process faster and easier, the application is based on self-assessment and doesn’t ask for proof of eligibility.
Submitting proof would only slow the process down for both the applicant and the ATO but does this leave the scheme open to fraud?
According to an ATO spokesperson, there are a range of integrity checks to police the system and applications will be reviewed where there are concerns the claim was not made honestly.
“The ATO has sophisticated data-matching and analytical tools in place that enable us to identify people that may not be complying with their tax and super obligations,” the spokesperson said.
They added that applicants should keep any documentation which supported their application, in case they’re asked for proof at a later stage.
Mr Day said it was important to understand the eligibility criteria before applying to access their super.
“We will be conducting checks later, so if you've received a benefit as part of the COVID-19 stimulus measures and we discover you are ineligible, you can expect to hear from us,” he said.
Mr Day advised those who think they may have made an ineligible application to get in touch with the ATO or speak to a tax professional.