The regulator has identified a number of ways in which people try to access their super early on compassionate grounds, including fabricating or changing documents to indicate eligibility and attempting to access super through illegal promoter schemes.
Other methods include providing inaccurate information in documents, such as medical reports, not using super on an approved expense, and creating falsified ATO approval letters to present to super funds.
The regulator said early access to super on compassionate grounds is only available in limited circumstances to pay for certain expenses. To do so, a member must first meet all eligibility rules and provide the required evidence, including whether they can pay for part or all of the expense by other means.
It is illegal to access super early unless the conditions of release under superannuation law are met and members who breach the regulations face serious consequences.
The Tax Office warned that people should be cautious of registered agents, health practitioners and other people who promote early access and said that where these entities act inappropriately regarding an application, the member can be liable for any consequences, including penalties for making a false or misleading statement.
It provided a number of examples where this could occur, including providing your myGov sign-in details to a registered agent or another person who then provides the ATO with inaccurate information.
If a health practitioner provides a medical report that is inaccurate, such as incorrectly advising that cosmetic treatment is necessary, and the member provides the ATO with that report, they can also be held liable.
“If a third party is assisting you to apply, it is important that you review your application and any documents you intend to provide us before you submit your application, to ensure they are accurate,” the Tax Office said.
If the ATO finds an approved application included falsified documents or incorrect information, it will cancel the approval letter provided, meaning the member may be charged extra tax on the super payment at the marginal tax rate instead of the concessional rate.
It may also correct their income tax return to ensure the payment and withholding tax are accurate, which could involve amending the member’s return or issuing a default assessment.
If a default assessment occurs, it may result in additional income tax due to how the payment is reported, tax shortfall penalties for making false or misleading statements when lodging a return and interest charges on any shortfall.
Furthermore, the ATO said anyone making false or misleading statements when accessing their super on compassionate grounds may face penalties. Health practitioners or other parties who facilitated the application may also face penalties.
It may also prosecute anyone who promotes a scheme to illegally access super. This can result in civil and criminal penalties, including significant fines and imprisonment.
Before applying, members need to ensure that all the information they are providing is accurate, including the content within medical reports.
If a member has inappropriately accessed their super, they can make a voluntary disclosure to inform the ATO of the error or false or misleading information that was provided.
The voluntary disclosure can be made in writing or via the phone and may result in a reduction of any penalties or interest that would otherwise apply.
