ATO fails to penalise Australians who were proven ineligible to access their super savings
The Australian Taxation Office is investigating people who have incorrectly withdrawn up to $20,000 of their retirement savings under the Federal Government’s early access to super scheme.
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Exclusive: The Australian Taxation Office has failed to take any action against people accessing their superannuation early who have been proven to be ineligible.
Australians have been able to access up to $20,000 tax-free during the pandemic but on Monday the ATO confirmed no action had yet been taken against anyone found to be doing the wrong thing.
Under the Federal Government’s early access to super scheme about 2.72 million applicants have withdrawn $33.3 billion.
The ATO’s second commissioner Jeremy Hirschhorn said the incorrect withdrawals were because of “misunderstandings of eligibility, not conscious abuse of the scheme”.
The ATO is currently doing a second pilot looking into 2000 people who are at potential risk of noncompliance.
Industry Super Australia’s chief executive officer Bernie Dean said the government had repeated warnings about the “self-assessment model” which would “allow ineligible claims to pass through.
“The absence of a cop on the beat just fuels criticism that this was a stimulus measure designed to encourage some Australians to raid their retirement savings to bail out the economy,” he said.
Penalties include fines or tax implications on a person’s incorrect withdrawals.
Despite many people being hit hard during the pandemic the amount of money Australians need annually to live a comfortable retirement has fallen as many costs including petrol, electricity, gas and water drop.
New figures from the peak superannuation body, the Association of Superannuation Funds of Australia (ASFA), showed a decrease in everyday expenses.
The data showed in the June quarter to retire comfortably Australians couples aged 65 needed $61,900 per year and singles need $43,690 – decreases of 0.8 per cent and 1.1 per cent respectively.
This is based on the premise they own their home outright, have good health and can access a part aged pension.
A comfortable retirement includes having a good standard of living, private health insurance, a reasonable car, good clothes and the ability to travel domestically and internationally.
The standard examines all groups in the Consumer Price Index and showed the biggest price falls during the June quarter were petrol (down 20 per cent), electricity (down 2.5 per cent), gas (down 0.6 per cent) and water (down 0.6 per cent).
ASFA’s chief executive officer Dr Martin Fahy said Australians should look at any cuts to their budgets and see if they could tip additional money into super.
“Look at saving that money for a rainy day but also look at putting it an as additional contributions to superannuation,” he said.
The data also showed some prices climbed during the June quarter including cleaning and maintenance products (up 6.2 per cent), toilet paper and cleaning wipes (up 4.5 per cent), furniture (up 3.8 per cent), and household appliances (up 3 per cent).
ASFA figures show to achieve a comfortable lifestyle couples need $640,000 saved by time they retire while singles need $545,000.
Debate continues to rage around whether the compulsory superannuation rate should climb from 9.5 per cent to 12 per cent from 2021.
The Reserve Bank of Australia governor Dr Philip Lowe said the move would reduce wages, cut spending and result in less jobs.
Originally published as ATO fails to penalise Australians who were proven ineligible to access their super savings