The government has rejected suggestions that its Early Access to Superannuation Scheme is prone to fraud and misuse, and it plans to proceed with the second stage in July without any changes.
Assistant Minister for Superannuation, Financial Services and Financial Technology, Jane Hume, said the Australian Taxation Office, which is administering the scheme, is equipped to deal with any fraud risks and can monitor use of fund payouts if it sees the need.
Speaking at a Bloomberg webinar yesterday, Hume said around two million people had withdrawn around A$14 billion under the scheme. “This has worked exceptionally well,” she said.
Under the scheme, individuals financially affected by COVID-19 can access $10,000 before June 3 and a further $10,000 from July 1 to September 24.
In response to questions about risks involved in the scheme, she said: “This is a self-assessment program, like filing a tax return. There are fines for making false statements and the ATO has the powers to check and verify applications.”
On the question of how people are using the payments, she said: “The government is not in the business of telling people how to spend their money. We believe some of the statistics on this have been misleading.”
Early in May, the ATO reported that a small number of people had their personal details used unlawfully in an attempt to defraud the program. It said the fraudulent access had been stopped and the people affected had been contacted.
The ATO referred the matter to the Australian Federal Police.
Hume said: “There has always been early access to super in cases of hardship. In this case we changed the definition temporarily.
“We may not go back to the same definition of hardship when the temporary period is over. Those definitions were a little clunky and arbitrary.”
Hume also rejected the suggestion that the policy had created problems for super funds.
“I don’t agree that the funds have had problems paying the money out. The amount coming out is less than 10 per cent of the contribution inflow last year.
“If there has been an issue for the funds it is the large number of members changing their asset allocations to cash.