Highlights
- Illegal early access to super funds could result in penalties up to $12,000
- Australians financially hit by coronavirus can access up to $20,000 in super
- Temporary visa holders including international students can also access up to $10,000 in super
Individuals who accessed their super funds without meeting the eligibility requirements could face up to $12,000 in penalties for each false and misleading statement.
According to the federal government’s scheme, only people out of work and facing financial hardships due to the coronavirus pandemic can access up to $20,000 in super and take it out tax-free- the first $10,000 between April 20 and June 30, 2020, and a further $10,000 until September 24.
Illegal early release of super:
The government had expected 1.5 million Australians would avail the scheme, but over 2 million have already requested for an early release of funds, prompting the taxation office to warn people against fraudulent withdrawals.
“You'll have to pay interest and significant penalties on your super if you have accessed it illegally,” the ATO has stated on its website.
Illegal early release of super funds could result in hefty penalties, warns ATO Source: Getty Images
The ATO states that a further action would be considered against all ineligible applicants.
“If we find that you have applied for COVID-19 early release of super when you do not qualify, or mainly for the purpose of obtaining a tax benefit, (for example as part of a re-contribution strategy involving the claiming of a personal super contribution deduction), we will consider taking further action."
Who is eligible to access their superannuation early?
Outlining the consequences of illegal release of super in an interview with SBS Punjabi, tax accountant Manpreet Singh said individuals applying for this scheme must beware that the ATO is managing the eligibility criteria under strict guidelines.
"ATO has stipulated strict eligibility criteria for Australian citizens, permanent residents, temporary residents, including international students who have been here for more than a year,” said Mr Singh.
According to the eligibility criteria, people must either be unemployed, or eligible for welfare support payments, or were made redundant on or after January 1, 2020, or have had their working hours reduced by 20 per cent or sole traders whose business has been suspended or seen turnover fall by at least 20 per cent can apply under this scheme.
Mr Singh warned that the ATO is using "improvised technology" to verify the details and circumstances of the people availing the scheme.
“They look into tax returns and are using advanced technology such as Single Touch Payroll data and other relevant information to verify details of those claiming the super funds early,” he said.
Mr Singh added that in some cases, the ATO has even prevented people from accessing super to maintain the integrity of the scheme which was brought in to safeguard the interests of the people who have been genuinely impacted by the pandemic.
“They review circumstances while processing the application on a case by case basis so make sure you read the information provided on the ATO website and seek financial advice before accessing super funds,” he advised.
Click on the player above to listen to the interview in Punjabi.
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