Nearly half of Australians who dipped into their superannuation because of coronavirus HADN’T suffered a drop in earnings… and they could be in big trouble with the taxman VERY soon
- Australians and Kiwi expats can withdraw up to $20,000 from superannuation
- The early access to superannuation is available to those impacted by pandemic
- AlphaBeta and leading credit bureau illion are tracking economic impact
- Almost 40 per cent receiving second round of cash saw no drop in earnings
Almost half of those who claimed a second round of cash from their superannuation amid the coronavirus pandemic hadn’t suffered a drop in earnings, research has revealed.
Citizens and permanent residents were able to access $10,000 of their super until June 30 and an additional $10,000 from July 1 if their income had fallen.
AlphaBeta and leading credit bureau illion partnered to track the economic impact of the COVID-19 crisis.
Their analysis revealed almost 40 per cent of the 1.35 million Australians who applied for early access to their superannuation hadn’t seen a drop in their income.
Australians financially impacted by the coronavirus pandemic are allowed to dip into their superannuation. Pictured: Nail Technician Lily Nguyen is seen wearing a mask and face shield at the Depot Nail Bar in Broadway Shopping Centre, Sydney
Recipients who were granted the second round of super withdrawals spent an extra $3,618 during the first fortnight, compared to $2,855 during the first lot of super withdrawals. Pictured: Data from AlphaBeta-illion and leading credit bureau illion
Recipients who were granted the second round of super withdrawals spent an extra $3,618 during the first fortnight, compared to $2,855 during the first lot of super withdrawals.
The data revealed 64 per cent of the spending during the second round was ‘discretionary’, including gambling (11 per cent) and clothing (10 per cent), while 24 per cent was ‘essential’ and 12 per cent was ‘debt repayment’.
The research was based on a sample of 13,000 Australians who withdrew their super in round one and 10,100 who accessed the cash in round two.
Cash spent on groceries during the first fortnight with the lump sum increased by more than $200 – from $320 in round one to $531 in round two.
Those wishing to access the cash were told they had to meet strict criteria such as being unemployed, being made redundant or having working hours reduced by 20 per cent.
However, there were few checks on this when people applied – and now the ATO is launching a crackdown on people who took money out of their superannuation that they were not eligible for.
The data revealed 64 per cent of the spending during the second round was ‘discretionary’, including gambling (11 per cent) and clothing (10 per cent), while 24 per cent was ‘essential’ and 12 per cent was ‘debt repayment’
Pictured: Two women wear face masks while out shopping in Sydney’s CBD
‘The government has amped up warnings on compliance checks and penalties for misuse of this scheme but that doesn’t seem to have stopped withdrawals by many who should not be using it,’ AlphaBeta director Andrew Charlton told the Sydney Morning Herald.
The Australian Tax Office has warned they will take action against people who have deliberately exploited the system during the unprecedented health crisis.
‘Compliance remains one of our priorities to ensure the integrity of the tax and super 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.’
Those who provide false or misleading information could face penalties of more than $12,000 for each false and misleading statement.
More than 2.7 million people have acted on the early access to super funds during the pandemic, withdrawing more than $33 billion.
Pictured: A COVID-19 testing site in Melbourne during the Victoria’s second wave of infections