Taxpayers wrongly targeted by Australian Taxation Office to get compensation
The Australian Taxation Office debt recovery system is expected to undergo a shake-up in a win for small businesses and individuals, as 1.6m super fund accounts will also get lost savings. SEE HOW IT AFFECTS YOU
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Taxpayers pursued by the Australian Taxation Office are set to benefit from sweeping changes to the debt recovery system.
Compensation owed to small businesses and individuals wrongly or unfairly pursued by the ATO will be paid in a more expeditious manner, The Australian reports.
In addition, the way any debt is collected will be overhauled, with the ATO accused of being heavy-handed in its handling of these cases.
Recent statistics show an increase in the number of complaints against the ATO and the government says it will adopt all 12 recommendations of a review of the treatment of small business tax cases.
The scheme would make it easier for small businesses to apply for compensation and ensure improved oversight of ATO cases.
Failing to lodge tax returns annually could end up leaving Australians with massive debts running into hundreds of thousands of dollars.
Meanwhile, one million Australians’ banks accounts will soon receive a surprise cash injection from the ATO.
And about 1.6 million super fund accounts will also get a financial boost as part of a mission to reunite people with their lost savings.
Fresh changes to superannuation laws mean the ATO can now automatically transfer money to people from their inactive super accounts with balances below $6000.
The money will go to their active super fund, but if it’s under $200 or they’re aged over 65 it will go directly to their bank account.
The ATO has been collecting cash from super funds and will start the transfer process on November 1.
Association of Superannuation Funds of Australia deputy CEO Glen McCrea said all the money should all be transferred by the end of November.
“We estimate that 2.6 million Australians may get an early Christmas present,” he said.
“A lot may be $40 or $50 but it’s a welcome surprise,” he said.
Mr McCrea said legislation passed this month also meant the ATO could now pay interest on super amounts that it proactively reunited with people.
“On higher balances that have been held by the ATO for some years this interest amount can be substantial,” he said.
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ASFA estimates at least 10,000 transfers will involve tens of thousands of dollars.
Previously people had to apply to the ATO to get their unclaimed super, but now it can return money to people – with an interest component linked to CPI – without an application.
The ATO held about five million super accounts worth $3.9 billion at June 30 this year.
Mr McCrea said the transfers were “a great opportunity for people to engage with their super”.
“For many Australians it’s the second-biggest asset outside the family home,” he said.
An ATO spokeswoman said super funds had been co-operating and had until October 31 to send it people’s low-balance inactive super accounts.
She said the ATO would attempt to notify people when it made payments to them.
“The balance of your inactive low-balance account will be transferred to us by your fund and, where possible, we will proactively consolidate it into an active super account on your behalf,” the spokeswoman said.
“Where the amount is less than $200 or you are aged over 65 years, the ATO will actively make a direct payment to you of your ATO-held super, including inactive low-balance accounts. If you fall under this category, it’s important to check your bank details are correct.
“You can update your financial institution details on ATO online, which can be accessed via myGov.”