Nearly one million Australians have asked for earlier access to their retirement pensions to ease financial hardship caused by COVID-19. Australian Tax Office Deputy Commissioner Sonia Corsini answered your questions online today.
ALMOST a million Australians have applied for access to their retirement pensions under a special COVID-19 early release program designed to ease financial hardship caused by the crisis.
At a press conference at the Houses of Parliament on May 1, Prime Minister Scott Morrison announced that more than 950,000 requests for early access to retirement pensions had been filed, for a total of $ 7.9 billion. dollars in claims.
Assistant Secretary of the Treasury Jenny Wilkinson told the Senate Special Committee on COVID-19 on April 28 that $ 6.3 billion had been approved for release.
Strict eligibility criteria must be met to be eligible for the program, which is open to citizens and permanent residents of Australia and New Zealand.
If successful, they can request up to $ 10,000 in fiscal year 2019-2020 and up to an additional $ 10,000 in 2020-2021. Eligible temporary residents can submit a single application for access to up to $ 10,000 Super in 2019-2020.
Sonia Corsini, Deputy Commissioner of the Australian Tax Office, was online today to answer your questions.
Here’s what she had to say:
Q. Are there any limits on how much money you can spend?
A. As long as you meet the eligibility criteria, there is no restriction on how you can use the money once you have withdrawn it from your Super Account. However, as with any financial decision, there can be consequences, some of which may not have been considered. You may want to execute your proposed strategy with a registered financial advisor or visit ASIC’s Money Smart website for helpful advice.
Q. If your super release is approved by the ATO, then can your super fund say no or must it comply with the decision of the ATO?
A. The ATO is responsible for evaluating your request. If we approve it, we will provide this information to your super fund. While the ATO cannot order your fund to make the payment, it is obligated to return the money to you as soon as possible. In most cases, it will be within five business days. In some circumstances, payments may take a little longer. For some funds, they may be prevented from releasing the money. It will depend on the circumstances of each case. You can visit your fund’s website for information specific to you.
Q. Can an Australian working overseas who has lost his job withdraw from his Australian Super?
A. Yes, as long as you meet the eligibility criteria, you can apply. But an important thing to remember is that you will need an Australian bank account.
Q. Why does it take so long for people to get their approval and even longer to access their funds?
A. The application is a two-step process. The ATO takes care of the first step. After you submit your request, it may take up to four business days for us to process (in many cases it’s less than that). Once we have approved your request, we will notify you via myGov. We can also send you an SMS or an e-mail. We then send this information to your super fund (s). The second step concerns your fund. ATO cannot provide status updates at this stage. APRA has issued guidelines to the super funds and they expect payment to be made to you within five business days. However, this time may increase when the funds need to contact you to clarify information. For example, when the information you provided on your request does not match the information they hold about you. It’s about protecting your super savings.
Q. My partner accessed his super after being told his hours would be reduced by 40% from early May. The application process was straightforward, the super payout arrived, $ 8,000. Then her employer adapted and started making a hand sanitizer so her hours weren’t really reduced. Does she risk penalties for accessing the super, even though there is a letter saying the hours would be reduced? The myGov process was very straightforward and there was no mention of potential penalty risks.
A. It’s great to hear that you and your partner found the application process easy. As long as your partner was eligible at the time she applied, there should be no problem. We understand of course that everyone’s situation is different and you may be eligible one week and then be in a different set of circumstances the following week, for example, finding a new job or finding that your employer has reinstated you or not reduced. your originally scheduled hours. We do not require you to provide any evidence at the time of your application showing that you are eligible, but we recommend that you keep records proving your eligibility, for example, the letter you mentioned.
Q. Do I have to notify Centrelink if I access super funds, and will this affect my payments? Will this also affect my child support payments?
A. The amount (s) you withdraw from Super under this program are tax free and you do not need to include it on your tax return. The impact of this program on Centrelink payments is outside my area of ââexpertise, perhaps contact Services Australia for advice specific to your situation. This link can also be useful.
Q. I applied this morning, how long will it take now to receive my money? Thank you!
A. We will process the applications and you will receive a notification in your myGov inbox within four days. We can also send you an email or SMS. If your request is approved, we will provide it to your super fund (s) so they can transfer the money to your bank account. APRA has issued guidelines to the super funds and they expect payment to be made to you within five business days. However, this time may increase when the funds need to contact you to clarify information. Once you have submitted your request, you do not need to contact us here at the ATO. We work as hard as possible to process requests quickly.
Q. My super is tax deferred. If I can remove it, do I have to pay tax on it?
A. The amount (s) you withdraw from Super under this program are tax free in your hands and you do not need to include it on your tax return.
Q. My request for early release from Super was denied. Can I appeal and what do I do?
A. Thank you for your question, but I cannot provide specific advice on your personal situation here. You would have received a letter in your myGov account which will provide you with information on the procedure to follow.
Q. How long will this program be open?
A. Applications can be submitted online via myGov, until June 30, 2020 for the year 2019-2020; and between July 1, 2020 and September 24, 2020, for the year 2020-2021.
More info is on our website.
You can read more answers in the comments below.