Powered by momentummedia
nestegg logo
Powered by momentummedia
Powered by momentummedia
nestegg logo
nestegg logo

 

 

Retirement

Labor takes early access to super scheme to Auditor-General

  • August 07 2020
  • Share

Retirement

Labor takes early access to super scheme to Auditor-General

By Cameron Micallef
August 07 2020

The Morrison government’s early access to superannuation scheme has been referred to the Auditor-General as it has been revealed that the Tax Office did not check eligibility.

Labor takes early access to super scheme

Labor takes early access to super scheme to Auditor-General

author image
  • August 07 2020
  • Share

The Morrison government’s early access to superannuation scheme has been referred to the Auditor-General as it has been revealed that the Tax Office did not check eligibility.

Labor takes early access to super scheme

The submission, which was published by shadow assistant treasurer and shadow minister for financial services Stephen Jones, points to fraud and theft in the early access to super scheme.

Mr Jones points to major problems within the scheme, including major theft and fraud issues, the lack of verification mechanisms for early access to superannuation, inaccurate and misleading promotion of the scheme and a $12 billion blowout in estimates of how much it would cost.

“The scheme was designed to provide financial relief for people experiencing income loss and hardship caused by the economic impact of COVID-19. This was the clear intent of Parliament in legislating for increased early access,” the submission reads.

“The government’s administration of the scheme appears to have departed from this legislated purpose.”

Advertisement
Advertisement

The early access to super scheme, which has now been extended to December this year, allows eligible members to take out $10,000 last financial year and a further $10,000 in this financial year if they are suffering hardships brought on by COVID-19.

When the program was announced, it was expected about 1.5 million people would withdraw up to $27 billion.

However, data published by APRA has revealed that almost $30 billion has so far been accessed by about 3 million people, with that figure expected to grow to $42 billion by yearend.

APRA’s data follows ATO’s statement last week that it was investigating hundreds of cases where people may have wrongly withdrawn from their superannuation, a figure which could grow as further inquiries are made.

The ATO has since launched a pilot examination that will see 130 ATO officers personally contacting people to confirm and prove they have met the eligibility requirements, including by having been made redundant or seeing their working hours reduced by 20 per cent or more.

ATO second commissioner Jeremy Hirschhorn said the scheme was designed on a self-assessment system, and a compliance program could not be enforced at the time of application because the ATO would not have live information of a person’s circumstances.

“It’s based on self-assessment. We work on the assumption that Australians are honest,” Mr Hirschhorn said.

“This is about getting emergency money to people. So, we will never have enough information to reject quickly. We will give people their money on the basis of their say-so.

“We don’t know yet whether, for example, they’ve been terminated, they’ve lost their job. We don’t know at the time they apply. We might have reasonable information a month later, when the next Single Touch Payroll comes in. So, that’s why it’s based on self-assessment.”

Mr Jones pointed out that the punishment for the administration failing could see taxpayers fined $12,600 tax liabilities on funds withdrawal and a disqualification of government support, including JobSeeker.

“Government ministers and senior public servants have acknowledged many of these failings but have not provided any details as to the government’s response.

“Despite these failings, the scheme is now being extended by the government for a further three months,” the statement concluded.

Labor takes early access to super scheme to Auditor-General
Labor takes early access to super scheme
nestegg logo

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article

About the author

author image

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

more on this topic

more on this topic

From the web

Recommended by Spike Native Network

More articles

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.