Australian Taxation Office Assistant Commissioner Sonia Corsini answers your questions
Almost one million Australians have applied to access their superannuation early to ease financial hardship caused by COVID-19. Australian Taxation Office Assistant Commissioner Sonia Corsini answered your questions online today.
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ALMOST one million Australians have applied to access their superannuation under a special COVID-19 early release scheme designed to relieve financial hardship caused by the crisis.
In a press conference at Parliament House on May 1, Prime Minister Scott Morrison announced that more than 950,000 applications had been made to access superannuation early, totalling some $7.9 billion in claims.
Treasury’s deputy secretary, Jenny Wilkinson told the Senate Select Committee on COVID-19 on April 28, that $6.3 billion had been approved for release.
There are strict eligibility criteria that has to be met to qualify for the scheme, which is open to citizens and permanent residents of Australia and New Zealand.
If successful, they can apply for up to $10,000 in the 2019–20 financial year and up to a further $10,000 in 2020–21. Eligible temporary residents are able to apply once to access up to $10,000 of super in 2019–20.
Sonia Corsini, Australian Taxation Office Assistant Commissioner, was online today to answer your questions.
Here’s what she had to say:
Q. Are there any limits on what you can spend the money on?
A. As long as you meet the eligibility criteria there is no restriction on how you can use the money once you have withdrawn it from your super account. However as with any financial decision there may be consequences, some of which you may not have considered. You may want to run your proposed strategy past a registered financial adviser or check out ASIC’s Money Smart website for some useful tips.
Q. If your super release is approved by the ATO can your super fund then say no or do they have to abide by the ATO ruling?
A. The ATO is responsible for assessing your application. If we approve it, we will provide that information to your super fund. While the ATO cannot direct your fund to make payment, they are required to release the money to you as soon as possible. In most cases, this will be within five business days. There are some circumstances where payments may take a bit longer. For certain funds, they may be prevented from releasing the money. This will depend on the circumstances of each case. You may like to check your fund’s website for information specific to you.
Q. Can an Australian working overseas who lost his job be able to withdraw from his Australian Super?
A. Yes, as long as you meet the eligibility criteria, you can apply. But an important thing to remember is you will need an Australian bank account.
Q. Why is it taking so long for people to get their approval and then even longer to access their funds?
A. The application is a two-step process. The ATO looks after step one. Once you have submitted your application, it can take us up to four business days to process (in many cases though, it’s less than this). Once we have approved your application, we will notify you via myGov. We may also send you an SMS or email. We then send this information across to your super fund or funds. The second step involves your fund. The ATO can’t provide status updates at this step. APRA has issued guidance to super funds and they expect payment to be made to you within five business days. However, this time may increase where funds need to contact you to clarify information. For example, where information you have provided on your application doesn’t match information they hold about you. It’s all about protecting your super savings.
Q. My partner accessed her super after being told her hours would be cut by 40 per cent from the start of May. The application process was simple, the super payment came in, $8000. Then her employer adapted and started making hand sanitiser so her hours were not actually cut. Is she at risk of penalties for accessing super, even though there is a letter saying hours would be cut? The myGov process was very easy and there was no mention of risks of penalties.
A. It’sgreat to hear that you and your partner found the application process easy. So long as your partner was eligible at the time she applied, there should be no issues. We of course understand that everyone’s situation is different and you may be eligible one week and then be in a different set of circumstances the week later, for example, securing a new job or finding that your employer has reinstated you or not cut your hours as originally expected. We do not require you to provide evidence at the time you applied showing that you are eligible, but we recommend that you keep records proving your eligibility, for example, the letter you mentioned.
Q. Do I have to notify Centrelink if I access super funds, and will it affect my payments? Will it also affect my child support payments?
A. The amount or amounts you withdraw from super under this program is tax-free and you do not need to include it in your tax return. The impact of this program on Centrelink payments is outside my area of expertise, perhaps get in touch with Services Australia for advice specific to your circumstances. This link may also be of use.
Q. I applied this morning, how long will it take now to receive my money? Thanks!
A. We will process applications and you will get a notification in your myGov inbox within four days. We may also send you an email or SMS. If your application is approved, we will provide it to your super fund or funds so they can transfer the money to your bank account. APRA has issued guidance to super funds and they expect payment to be made to you within five business days. However, this time may increase where funds need to contact you to clarify information. Once you’ve submitted your application, you do not need to contact us here at the ATO. We’re working as hard as possible to process applications quickly.
Q. My super is tax deferred. If I get to withdraw it do I have to pay tax on it?
A. The amount or amounts you withdraw from super under this program is tax-free in your hands and you do not need to include it in your tax return.
Q. My application for early release of super was declined. Can I appeal and how do I do this?
A. Thanks for your question, but I can’t provide specific advice about your personal situation here. You would have received a letter to your myGov account which will provide information about what to do next.
Q. How long will this scheme be open for?
A. Applications can be submitted online through myGov, until 30 June, 2020 for the 2019–20 year; and between 1 July, 2020 and 24 September, 2020, for the 2020–21 year.
More info is on our website.
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