The Australian Taxation Office has provided insight as to the penalties that will apply to Australians who have accessed the Early Release of Super scheme despite not being eligible.
The ATO has urged all Australians to carefully review the eligibility criteria and to be honest when applying for the ERS scheme.
"We will be reviewing applications and where we have concerns that the claim was not made genuinely, we may apply penalties," an ATO spokesperson said.
"The penalties that apply vary based on the facts and circumstances of each case. They can range from monetary penalties through to prosecution in exceptional cases."
|Sponsored by Jamieson Coote Bonds|
Our latest thinking helps you stay connected to markets.
The ATO said it will be reviewing cases closely, and in the event it discovers an applicant was ineligible for the scheme it may revoke the approval.
"Whilst there is no legal basis to require the individual to return the amount to their super fund, that amount may need to be included in the individual's tax return," the ATO spokesperson said.
"Where we revoke an approval based on eligibility, we would discuss the implications with that individual."
This comes after the ATO was forced to suspend sending applications to super funds for two business days in early May so the Australian Federal Police could investigate cases of fraud.
Deputy Treasurer Michael Sukkar had confirmed the AFP was investigating cases of identity theft and emphasised the ATO had not been compromised.
"It has been referred to the AFP, a case of identity theft essentially, where bogus claims have been put through the early release of super scheme," Sukkar said.
"This has been an extraordinarily popular scheme. In some respects, sadly popular."
The ATO told Financial Standard it is doing everything it can, along with the government, to support those who are going through a hard time as a result of the COVID-19 pandemic.
"People should be assured that across all of the stimulus measures, where they are trying to do the right thing, we will support them," the spokesperson said.
"Applicants will not need to pay tax on amounts released and applicants will not need to include these amounts in their tax returns if they meet the eligibility criteria."
Additionally, the ATO stressed that if anyone receives an SMS message claiming to be from the ATO stating their myGov account has changed, and they haven't changed it, to immediately inform the ATO and not click on any links.
Read our full COVID-19 news coverage and analysis here.