Early superannuation withdrawals frozen as hacking fallout revealed
Early superannuation withdrawals have been halted following a hacking attack, with fears $120,000 has been stolen from the nest eggs of up to 150 Australians.
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The Australian Taxation Office is pausing applications for early access to superannuation after instances of identity fraud were detected.
More than 1.2 million Australians have applied to withdraw nearly $10 billion from their super accounts during the coronavirus pandemic.
But federal police fear up to 150 people have lost $120,000 due to identity theft.
Assistant Treasurer Michael Sukkar said claims to early super would be frozen while the alleged frauds were investigated.
“Today we will undertake that process just to make sure there is nothing more that the ATO could do,” he told Sky News on Friday.
SUPER HACKING FALLOUT REVEALED AS ARREST WARRANTS ISSUED
Fraudsters have attempted to access the superannuation accounts of up to 150 Australians.
Five search warrants have been executed in relation to the fraud, Australian Federal Police commissioner Reece Kershaw told a Senate inquiry on Thursday.
Bank accounts containing about $120,000 have been frozen.
No government systems have been hacked, Mr Kershaw said, but a third party provider has been.
The attack may relate to a tax agent.
The fraud relates to more than one superannuation provider.
“It is quite sophisticated,” Mr Kershaw said.
Australians are able to access their super early to help them financially during the coronavirus pandemic.
Australian Taxation Office boss Chris Jordan has urged the public to remain vigilant with their information.
“I would really wish to emphasise that people do keep personal information secure and private,” he told the inquiry.
The fraud was first detected by Austrac and the ATO was alerted on April 30, before it was referred to the police a day later.
Industry Super Australia raised concerns with the government about the potential for fraudulent claims, and was told the ATO had checks to guard against fraud. More than one million applications for early super have been approved, totalling about $9 billion.
Labor leader Anthony Albanese says Australians should never have been able to access their retirement savings early.
“We should be ensuring that superannuation is for people’s retirement,” he told reporters in NSW.
“The government has to explain why it is that the mechanisms weren’t in place to protect people’s savings.” The Senate inquiry is looking into the government’s response to the coronavirus pandemic.
Thursday’s hearing will also gather evidence from Treasury officials.
HOW THE HACKING UNFOLDED
The Australian Taxation Office yesterday detected fraudulent activity in relation to the Federal Government’s early access to superannuation scheme.
The Australian Federal Police has been called in to investigate the matter urgently after it was raised to the ATO’s attention on Wednesday.
The popular scheme has already been taken up by more than 1 million cash-strapped applications since money could start to be withdrawn from April 20.
The ATO’s Commissioner Chris Jordan said the fraud has been detected and is being dealt with by authorities in regards to the early release of super.
“I can confirm that some limited fraudulent activity has been identified and immediately acted upon,” he said today.
“It is now an operational matter without colleagues at the AFP and so I cannot comment further.
“I would remind all Australians to be vigilant in keeping their personal information secure and private.”
His comments come after an ATO statement said all appropriate measures were being put in place to secure people’s personal information.
“Measures designed to protect the integrity of the early access to superannuation scheme have helped detect a small amount of fraudulent activity associated with the program,” the statement said.
“A small number of people appear to have had personal details unlawfully used in a bid to defraud the program.
“This has been stopped and the impacted individuals are being contacted.”
The ATO said their online systems remained safe and secure.
It has had a record number of people phoning them up, towards the end of April they averaged 90,000 calls every day.
Their previous record was 71,000 calls in one day.
It is understood about 100 applications made to the scheme have been impacted.
Under the early access to super scheme eligible applications who have been made redundant this year or suffered a significant income loss can apply to access $10,000 now and another $10,000 in the new financial year tax free.
Latest figures show already 1.105 million Australians have been given approval by the ATO to access their retirement savings early equating to $9.1 billions.
The average amount withdrawn is $8829.
Australians can apply to access super early though myGov.
To apply they can click on the ATO icon, go to the COVID-19 section and follow the application process.
Many Australians have been complaining about not being able to get their super quick enough after they have lodged an application with the ATO.
Earlier this week the financial regulator, the Australian Prudential and Regulation Authority’s deputy chair Helen Rowell, said funds were moving as quickly as possible to process applications to ensure cash-strapped people were receiving their money.
“Trustees should be making these payments as quickly as they can but also we accept it’s important that you allow flexibility for things where that is just not possible,” she said.
She said of all applications sent to funds from the ATO 95 per cent got processed almost automatically while only five per cent fell outside this.
Ms Rowell said the guidance is to release the money within five business days or “as soon as practicable”.
The applications are first made with the ATO who then pass on approved applications to funds.
From here the funds process then check the application and process the money.
There’s been many concerns within the industry of processing claims too quickly for fear they may be unable to do thorough checks to stamp out fraudsters.
Originally published as Early superannuation withdrawals frozen as hacking fallout revealed