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ATO zoning in on early release of super breaches

Adrian Flores
Adrian Flores
04 January 2021 1 minute readShare

The Australian Tax Office has begun investigating cases where there may have been breaches of the early release of super scheme after the program ended at the end of 2020.

The COVID-19 early release of super program closed on 31 December 2020, and payments for applications submitted by 31 December will be made throughout January, the ATO said in an update on its website.

Behaviours attracting the ATO’s attention include:

  • applying when there is no change to regular salary and wage or employment information
  • artificially arranging affairs to meet the eligibility criteria
  • making false statements or fraudulent attempts to meet the eligibility criteria
  • temporary resident applicants attempting to apply as a permanent resident or citizen after 1 July 2020
  • withdrawing and recontributing super for a tax advantage.

The ATO said it is investigating some cases and may consider it appropriate to apply the general anti-avoidance rule for income tax (known as Part IVA) in relation to a COVID-19 early release of super arrangement if someone enters into a scheme mainly for the purpose of obtaining a tax benefit.

Further, it highlighted the sources it uses to check for claims made incorrectly, including:

  • Single Touch Payroll (STP)
  • income tax returns
  • information reported to us by your super fund
  • third party data from agencies including
    • Services Australia
    • Home Affairs.

“Compliance remains one of our priorities to ensure the integrity of the tax and super systems. We will take action where people deliberately exploit the system,” the ATO said.

“We have seen some COVID-19 early release of super examples where people are doing the wrong thing.

“In some cases, we have stopped applications and prevented super money from being released. In other cases, we review circumstances after an application has been processed to ensure the integrity of the program.”

ATO zoning in on early release of super breaches
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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