The Tax Office has said it has commenced its second pilot seeking to hunt out individuals rorting the early super release scheme.
The ATO previously confirmed it had commenced early inquiries into how many early super applicants had not complied with the financial distress requirements for withdrawal, through its pilot program.
On Friday, Jeremy Hirschhorn, second commissioner at the ATO’s client engagement group told the Senate select committee on COVID-19 the Tax Office had selected a random sample of 160 applicants and managed to contact 80 of them.
The ATO had previously completed a population analysis, an initial sweep of all applicants against data sources. It confirmed the majority (90 per cent) of all applicants were in fact eligible for the scheme, which aligned with around the same proportion of the 80 individuals contacted.
The remaining 10 per cent of the contacted individuals were said to have misunderstandings around eligibility, not conducting “conscious abuse of the scheme”.
Mr Hirschhorn said the ATO has since commenced a second pilot, still in its early stage, examining 2,000 individuals that it suspects to be at a higher risk of breaching eligibility requirements.
To date, the ATO has not yet withdrawn any early super approval declarations or levied any fines against candidates. The removal of the declaration would see individuals taxed on their super withdrawal.
“Our general practice if somebody had a general genuine misunderstanding, we will not withdraw the declaration, we will not levy penalties,” Mr Hirschhorn said.
“But if there are more deliberate actions, that will go on an increasing scale. The first level is to withdraw the declaration, and the highest level is to issue penalties. I think this is more likely, in practice, particularly the higher penalties, to apply… to people who have withdrawn a second time, knowing they are ineligible.”
Treasury officials confirmed on Friday that to date, $33.3 billion has been withdrawn under the scheme, for 2.72 billion applicants.
The ATO has previously estimated around one in 5,000, or around 0.02 per cent early super claims have been fraudulent – around 800 in total across the scheme. It does not however know the total amount stolen from accounts.
Mr Hirschhorn commented that early super fraud estimate has not shifted and the ATO would hope super funds would refer cases of fraud to the police, but they are not required to.
Labor Senator Kristina Keneally also asked the Tax Office commissioner if a recent arrest of three women in Queensland around early super fraud had come as a result of Tax Office processes but Mr Hirschhorn declined to comment, citing ongoing police investigations.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
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