Tax office has X-Ray vision
It’s not only superman that has X-Ray vision when it comes to your Superannuation, it’s also the Australian Taxation Office (ATO). Two million Aussies have jumped to the front of the queue to access the first $10,000 available to draw down.
And the ATO is watching.
Those that have chosen to access their super must effectively self-assess and comply with the criteria laid down for eligibility, being:
- Citizen of Australia or New Zealand
- Must have become unemployed
- Be receiving JobSeeker, or Youth Allowance, Parenting Payment, or
- Have seen their working hours reduced by at least 20 percent.
- Sole traders whose turnover fell by 20 percent or more are also eligible.
If you don’t meet the eligibility criteria and you have accessed your Superannuation without meeting those requirements you could face fines of up to $12,600.
The Australian Tax Office is using Income Tax Returns, Single Touch Payroll data, information from super funds and Services Australia data to monitor the financial realities of those seeking to withdraw from their superannuation fund.
Also anyone “artificially” arranging their affairs or making false statements to meet the eligibility criteria won’t pass the sniff test.
Those seeking “contrived” tax concessions by withdrawing and then making a contribution to re-contribute as a tax deduction to achieve a tax benefit could also see the noose hanging.
At this point, we’ll say that withdrawing $20,000 now, and let’s say you have 25 years till retirement, at a 5% year on year return, that value of that withdrawal on retirement would approximate $56,000. So, an extra $56,000 when you’re old could come in handy, it could mean the difference between a walking cane and that bionic knee joint you need.