ISA welcome ATO clamp-down on early release misuse

22 June 2020

Industry Super Australia (ISA) is encouraging the Australian Taxation Office (ATO) to follow through on beefing up enforcement to ensure people do not make inappropriate use of the Government hardship early access to superannuation scheme.

Reacting to a statement from the ATO that it has caught people doing the wrong thing and that it will be looking to catch people trying to exploit the scheme to minimise their end of financial year tax bill, ISA said that while it had consistently supported the policy intent of the early release scheme it had consistently warned there was a risk of it being misused.

“Unfortunately, those concerns have been realised with troubling reports of bank data showing money from super was being spent on discretionary items like alcohol, furniture or gambling,” the ISA said while noting that the ATO had also confirmed it has caught people doing the wrong thing.

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“We welcome the ATO’s renewed focus on compliance and its warning to applicants that it will use all available tools to find dodgy claims,” the ISA said. “The ATO has also warned they are on the look-out for those seeking to exploit the scheme to minimise their tax bill at the end of the financial year.”

“Members should carefully check the requirements before applying for access to their super, if the claim is found to be ineligible, they could be lumped with a far higher tax bill. Applicants found to have made a deliberately misleading claim could also be slapped with a $12,000 fine.”

ISA chief executive, Bernie Dean said that ineligible applicants were undermining the credibility of the emergency scheme and could actually be holding up payments for those who desperately needed the money now.

“The Australian Tax Office has a clear warning to those wanting to make a dodgy application – don’t - you will be caught, made to pay more tax and fined.”

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How dare consumers withdraw money from union super funds to "misuse" it feeding their family and keeping a roof over their head.

The unions need that money for paying union officials, investing in union controlled businesses, and corporate boxes at the footy.

Well that's right !
Now Cbus have the stand over skills of the CFMEU to ensure employers are contributing the correct amounts for members, they certainly wouldn't want funds leaving members account after all that hard intimidation work.
Whats the payoff for the CFMEU??......the access to 759,000 members to recruit to bolster their union membership ?
Maybe the ISA should give the Victorian Labor Party a call to ask how things are really done properly behind the scenes ?

What is the ISA carrying on about now other than a self preservation strategy to stop the bleeding of minies from their accounts ?
Are they trying to stop people withdrawing $10,000 now and then putting it straight back in as a Concessional Contribution to claim the deduction in a bid to reduce their assessable income ?
Sure they lose 15% on the way back in, but they would have lost that anyway had they made the contribution with other monies. That strategy would allow them to use another $10,000 amount to pay a lump sum off their mortgage and also get the tax deduction by withdrawing and then re-contributing........isn't that a win/win ?
As their income has most likely been significantly reduced in the last quarter of this financial year to be able to access the early release super monies, this may have a positive impact on the level of tax return available into the new financial year, giving them more money to assist them by getting a higher portion of income tax back.
Is that exploitation or " dodgy" because I didn't think there were any restrictions around what you could do with the monies once received ?
The meth and cocaine dealers have also had a cracker of a quarter!!.......most unfortunately.

This is big business going mad. I get they don't want people misusing the system but fundamentally, let's not forget that it's our money, not theirs. And you want to penalize people from spending their money on their families. FFS. Good luck with that, the world has gone mad. Access to my money (while I am a legitimate case) is none of their f#@#$ business. This infuriates me. There is enough pain and suffering going on as it is and they want to punish people now. I dare them. I'm so over big business that I'm not taking this crap from them anymore.

Fine sentiments Ned. But it's not big business you should be getting angry with. It's big unions. The super funds experiencing most of the early withdrawals are controlled by unions. HostPlus, REST, CBus, Australian Super.

ISA is the umbrella group for these union controlled superannuation funds.

What about if an industry super fund member withdrew $10,000 in this financial year and $10,000 early next financial year and donated it all to their trade union of choice ?

Who's money is it anyway????
For all of them to sit on mega paychecks and tell us hard working Australians that while life is really hard due to the Pandemic that we can't excess and use our own money for whatever our needs are
Stop giving our money to refuges and boat people and also welfare cheats

Oh yes, it would be such a scam to "steal" my own money and put it back in to economy. Oh no Gambling and alcohol. Two of the governments biggest money makers what a real shame. Idiots with their scare tactics.

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