Access to $10,000 Superannuation in Virus Hardship Cases

Discussion in 'Superannuation, SMSF & Personal Insurance' started by Nodrog, 22nd Mar, 2020.

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  1. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Where is this example in the law?
     
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Its in the EM

    Page 144

    ATO would consider the EM in its determinations, rulings and how it interprets the law. The "usual hours test". Still a bit foggy. I have a list of around 20 things the ATO should be issuing a deterination on. NTAA agree on all too and are asking
     

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  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    The EM is not law
     
  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Tell the ato when they are the agency responsible for determining what is a lawful release Yes, the ATO will look at the law first. And any elements of the materials that accompany it. eg reduction in hours is prescribed by law. The EM refers to usual hours and prescribes a test not mentioned elsewhere. That how the omnimbus bill was written and it allows the Commissioner to adopt some very broad (temporary) discretions under the TAA to effect these measures. One is making (or cancelling) a determination under Reg 6.18B of SISR. This system is largely why we have rulings to bridge between legal uncertainty and the view of the Commssioner.

    Most elements of tax law are not statutory law. eg rulings, determinations, cases, appeals, decisions etc. One consistent element of tax law is that the ATO wont usually do the opposite of what is written.

    Its one of 20+ issues where there is lack of clarity in just the stimulus issues. EM says one thing and law says something else.
     
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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  6. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The ATO will determine their own interpretation of SIS Regulations which were altered by the Bill rather than seek a court view as they only do that on appeal etc Thats where it all falls apart Could get expensive for taxpayers to dispute the interpretation given by the ATO as regulator and as Commissioner under TAA if they want to argue the point about usual hours and the basis for calculation. I just dont understand why the Bill didnt contain actual rules a average taxpayer could read and follow. Even lawyers wont know what the SISR mean. And its not the ATO fault - They just follow what the laws are.

    Tax law should contain a stupidity rule. If the Parliament is too stupid to consider interpretation then the taxpayer should be allowed benefit of the doubt. This would force Parliament to better standards. They have to include human rights and a bunch of touchy feely stuff but always leave gaps in practical application. Or allow the Commissioner (very) limited time to attach a tax ruling to each Bill.
     
  7. Pier1

    Pier1 Well-Known Member

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    In fact allowing the Commissioner time to attach a ruling may have prevented a number of people cashing in their Super at the absolute bottom and may have given others pause for consideration.
    A vast waste of future wealth, very sad
     
  8. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The intention is however quite clear. Some people need access to cash for genuine financial hardship. I think the policy is sound in that regard
     
  9. Tony3008

    Tony3008 Well-Known Member

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    After his Press Club address the Treasurer was asked about reports that 30% of money withdrawn has gone back into other savings, and his response (my rewording), "their money, don't care". Afterwards it was given out that half a million people have withdrawn their entire super balance. That's a lot of money that won't be spent in 20/30/40 years.
     
  10. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The law doesnt specific how a eligible person spends it. They can push it all onto red if they want or even plastic surgery. But thats their problem. And sure in 30-40 years it could be one of those things that peple refer to and ask what you did during the 2020 pandemic. It will be to our generations what our grandparents would say about the great depression.

    I would think 500,000 included a huge number of temp residents and yound casuals who also have the ability to draw down to pay living costs since they cant access any Centrelink. Paying for food and a roof over your head may well be a necessity. I dont think we should judge but I also dont want to hear their sad stories when they find the age pension a burden. Some say they are putting the $$$ into a home, a IP etc. Lets hope their poor financial planning and choices doent compound as a later regret. I hope they financially benefit whether they paid down debt or buy a new IP.

    I have heard a lot who thought it would help them buy a IP and lenders are knocking them back for accessing their super and forcing them to wait under respionsible lending laws. After all if you "need" the $$$ maybe you cant afford a loan. . The lenders arent calling it savings and want to see a pattern of saving.
     
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  11. SatayKing

    SatayKing Well-Known Member

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  12. SatayKing

    SatayKing Well-Known Member

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  13. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I have seen several instances of them checking. A client who claimed this then recontributed to super was asked for supporting information. It was 2 days apart from the withdrawal to the recontribution and the ATO can see the data. And the person was continually paid by a employer throught the period and super contributions were reported and uninterrupted. The amount recontributed topped the taxpayer up to their max cap. It seemed engineered to me. The ATO issued a decison to cancel the deduction under Part IVA. I see no merits to object.

    They have tonnes of data and are using it.
     
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  14. Baker

    Baker Well-Known Member

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    For those of us who have been made redundant due to COVID, and have accessed $10k super to help in the short term, if we get meaningful employment before the EOFY and pump money back into super under the concessional $25k.... will that pass the sniff test?
     
  15. jaybean

    jaybean Well-Known Member

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    I have a friend that got his 10k and went out and bought a second hand carbon fiber push bike worth $3.5k.

    Granted, he's an outlier (or so I'd hope).
     
  16. Empire

    Empire Well-Known Member

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    Yes bikes and luxury items have had a surge in demand, I presume the 10k is the main cause. Certainly isn't a boom in jobs.
     
  17. SatayKing

    SatayKing Well-Known Member

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    At a guess likely will revolve around your particular circumstances as outlined below and maybe the timing involved.

    "To be eligible, a citizen or permanent resident of Australia and New Zealand must require the COVID-19 early release of super to assist them to deal with the adverse economic effects of COVID-19.

    In addition, one of the following circumstances must apply:
    • you are unemployed
    • you are eligible to receive one of the following
      • JobSeeker payment
      • Youth Allowance for job seekers (unless you are undertaking full-time study or are a new apprentice)
      • Parenting payment (which includes the single and partnered payments)
      • Special Benefit
      • Farm Household Allowance
    • on or after 1 January 2020 either
      • you were made redundant
      • your working hours were reduced by 20% or more (including to zero)
      • you were a sole trader and your business was suspended or there was a reduction in turnover of 20% or more (partners in a partnership are not eligible unless the partner satisfies any other of the eligibility)."
     
  18. Baker

    Baker Well-Known Member

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    Yes I definitely qualified for and was granted the super releases. It seemed a sensible defensive position to take to have an extra $20k cash buffer available for the immediate term whilst I’m out of work for who knows how long.

    My only thought was if I do get a cash injection later in this financial year and throw a whack back into super, would that flag up with the ATO?

    Not an issue really , I’m playing by the book. Let’s hope I get a job again soon and actually have the money to put back in.
     
  19. SatayKing

    SatayKing Well-Known Member

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    Blowed if I know. Could depend on how someone interprets the words "to assist". Got to spend it but not just in case money. Was murkey then and seems to still be that way to a layperson such as me.
     
  20. qak

    qak Well-Known Member

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    If you are a person with a future DB pension, are you able to make a withdrawal like this (assuming you met the ATO criteria)? (How) would they recalculate your future pension to take account of that interim withdrawal?