ATO cracks down on Australians who withdrew super funds early

The Australian Taxation Office (ATO) is cracking down on millions of Australian who withdrew superannuation early under the government's coronavirus stimulus plan.

Two million Australians have withdrawn money, which has added up to a total value of $15 billion, APRA data shows.

Withdrawals of up to $10,000 are allowed up until June 30, however, the ATO plans to investigate those who have withdrawn cash.

Cantar Editor-at-Large Effie Zahos said the "self-assessment model" is what has prompted the crack down.

"The ATO trust that people do the right thing," she told Today.

"People are either misunderstanding, misleading the ATO, or down right doing a tax dodge by taking money out of super and putting it back into super to get the personal tax contribution."

Zahos said the ATO is still in the complaint stage but heavy fines and tax penalties could apply.

"The ATO has confirmed they are yet to issue any charges," she said.

"They are still looking through it."

The ATO told Zahos that people are confusing JobKeeper and JobSeeker, which could land them in hot water.

To qualify for early release you need to have become unemployed, be receiving the JobSeeker payment or other benefit like Youth Allowance or a parenting payment, or have seen your working hours reduced by at least 20 per cent. Sole traders whose turnover fell by 20 per cent or more were also eligible.

"There is a fine line between calling your self-unemployed to get this money out," Zahos said.

"Some are misunderstandings and some are purely misleading.

"The key thing is really have a look at the eligibility. Check it, and if not, do take care."

Any applicants who are unsure over any of the above criteria should seek the assistance of a tax professional or contact the ATO on 13 10 20.