A complainant raised concerns that the ATO had unreasonably withheld amounts released by her superannuation fund under the First Home Super Saver scheme (FHSS scheme). These amounts were to be used in buying her first home. The ATO instead decided to return the released monies to her superannuation fund as it decided that she had made errors on her application form that invalidated her claim and that the law prevented her from correcting that error or applying again under the FHSS scheme. She had raised her complaint with the ATO and explained that the errors were a genuine misunderstanding. The ATO did not change its decision following an internal review.

The IGTO commenced an investigation. The IGTO reviewed the ATO case notes and ATO call centre recordings and found that the errors were due to the complainant’s genuine (but erroneous) belief which was not dispelled during her calls to the ATO when she was seeking ATO assistance to complete her application (before and whilst completing her application) and that the ATO had failed to consider this relevant evidence. The IGTO found that the ATO had cancelled the FHSS Determination without lawful authority, which was likely due to a genuine (but erroneous) ATO belief that the errors had invalidated the Determination. Views on particular tax administration laws which impacted on this case were also communicated.

As a result, the IGTO recommended the ATO to provide an equitable remedy to the complainant, provide an appropriate apology and consider compensation for the loss caused. The IGTO also made recommendation for broader improvements, including improvements to the ATO’s administration of the FHSS scheme and its governance of ATO adherence to the Taxpayers’ Charter. As the Government had also announced potential amendments that would assist complainants to rectify errors made on their FHSS applications, the IGTO also recommended the ATO to take steps to address the risk of individuals suffering adverse consequences due to making errors on applications prior to the enactment of the legislation.

Following consideration of a lengthy IGTO report which detailed the evidence, the ATO ultimately agreed to release the FHSS amounts to the complainant with an apology and advised that it had made improvements to its administration of the FHSS scheme. The ATO also agreed to contact individuals who had previously been denied access to release of FHSS amounts due to errors on their application (after the proposed amendments to the FHSS legislation have been enacted) and offer to remediate their case.