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The COVID-19 early access to your super closed on 31 December 2020. This is a guide about what you can do if you obtained early release of your super when you may not have been eligible. It outlines what the eligibility criteria was and what evidence you may need to prove you were eligible if you are contacted by the Australian Tax Office.
It also covers what steps to take if you made a genuine mistake when you applied and what the ATO could do if you deliberately applied when you were not eligible.
COVID-19 early access to your super
- Between 20 April 2020 and 31 December 2020, some people financially affected by COVID-19 were allowed to access their super early.
- If you were eligible, you could apply to access up to $10,000 before 30 June 2020. Applications for these funds closed 30 June 2020.
- If you were eligible, you could also apply to access up to $10,000 after 1 July 2020 and on or before 31 December 2020. Applications for these funds closed 31 December 2020.
- COVID-19 early access to super payments are tax free and did not affect Centrelink or Veteran’s Affairs payments.
How did eligibility work for COVID-19 early access to super?
The Australian Taxation Office (ATO) was responsible for processing applications for the COVID-19 early access to super.
When processing applications, the ATO did not check or verify your financial situation. This means that the ATO did not check your level and source of income or employment status. The ATO instead relied on your statement that you met the eligibility criteria.
Eligibility criteria for COVID-19 early access to super
Australian and New Zealand citizens and permanent residents
To be eligible to apply for COVID-19 early release of super in the 2020 – 21 financial year you must have been adversely financially affected by COVID-19 and:
- Unemployed OR
- Eligible to receive the JobSeeker payment, Youth Allowance for Job
Seekers, parenting payment, special benefit or farm household allowance OR
- On or after 1 January 2020:
- you were made redundant,
- your working hours were reduced by 20% or more
- your business was suspended
- for a sole trader, your business was suspended or your turnover dropped 20% or more
Only Australian citizens and permanent residents could apply for COVID-19 early release of super, if they met the above eligibility criteria, in the 2019-20 financial year.
Temporary Resident were eligible to apply for COVID-19 early release of super in the 2019–20 financial year. To be eligible, a temporary resident must have been in one or more of the following circumstances:
- held a student visa which has been held for 12 months or more and be unable to meet immediate living expenses.
- A temporary skilled work visa holder whose hours have reduced to zero and remains engaged with their employer.
- A temporary resident visa holder (excluding a student or skilled worker visas) who cannot meet immediate living expenses.
Temporary Residents were not eligible to apply for COVID-19 early release of super in the 2020-21 financial year.
Will the ATO contact you?
The ATO uses a variety of ways to check the integrity of applications for COVID-19 early release of super. Where they are concerned an application may not be genuine then they will review it. The ATO may also use random checking.
The ATO has contacted you when you thought you were eligible to apply
You will need to provide evidence that you were eligible to apply if requested by the ATO.
Evidence you could use includes:
- Centrelink Income Statement for when you applied
- Bank account statements
- Letter confirming redundancy
If you are worried about what to say and what evidence to use call us for advice.
If you think you may have been ineligible to apply
If it was a genuine mistake or misunderstanding then this is a reasonable reason. The ATO has said it will work with you when you made a genuine mistake.
If you made a mistake then you should take the following steps:
- If the ATO calls you do not be afraid to explain how you made a genuine mistake. This could include:
- Why you thought you were eligible
- Difficulty reading and understanding the form
- You misunderstood what was happening because you did not understand super or how it worked
- Call us for advice on how to talk to the ATO. We can also refer you to a free financial counsellor who may be able to help you identify relevant documents to support why you thought you were eligible.
- Get relevant evidence together to support your case
- If you have not used the money then consider returning it to your super fund. Do not claim a tax deduction on the returned funds as the ATO has specifically stated this is tax avoidance.
- If you have used the money, then explain how you used it
What could happen if you deliberately applied when ineligible
If the ATO finds that you have deliberately provided false or misleading information when you applied for COVID-19 early release of super then:
- the ATO may reverse their approval of your application and the amount that was paid to you under COVID-19 early release of super will:
- become assessable income
- need to be included in your tax return and you will pay tax on the released amount.
- The ATO may issue you with an administrative penalty of more than $12,000 for each false and misleading statement you make
If you receive a penalty notice from the ATO make sure you get advice and contact the National Debt Helpline on 1800 007 007.
Speak to one of our financial counsellors
If your problem still hasn’t been solved, or you’re feeling overwhelmed, call us on 1800 007 007 to speak with one of our financial counsellors.