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Case Studies

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.

The complainant raised concerns regarding the ATO’s decision to retain his GST refund as he had multiple outstanding Business Activity Statement lodgements. The complainant explained that he was experiencing financial hardship and required the funds to pay his tax agent to meet his lodgement obligations. The complainant further explained that he was going to be evicted from his home and also required the funds for bond and rent in advance.

The IGTO commenced an investigation and identified that the ATO has the discretion to release a refund under serious financial hardship or significant impact to a business’s viability. The IGTO requested the ATO to consider releasing the refund based on the complainant’s circumstances and facilitated the provision of further information. The ATO agreed to release the refund of approximately $17,000.

The complainant was not able to finalise her daughter’s deceased estate with the ATO as it required her to provide it with a Letter of Administration (LOA) before it would recognise her as a legal personal representative (LPR). The complainant experienced difficulties in her attempts to obtain a LOA. The Supreme Court of South Australia did not provide her with a LOA as her deceased daughter had no estate to administer and requested that she discuss the matter further directly with the ATO given the financial costs that she would incur in further attempts to obtain a LOA.

During our initial discussions with the ATO, the ATO did not agree to release the monies in the estate to the complainant.

The concerns raised by the complainant were similar to those that we had examined in our review of Death and Taxes: An Investigation into Australian Taxation Office Systems and Processes for dealing with Deceased Estates. Amongst other things, the IGTO had recommended that the ATO confirms its position on the interaction between State and Territory succession laws and tax laws to confirm which ‘representatives’ of the deceased can represent the deceased for various tax purposes, particularly in circumstances where neither probate nor LOA are required by State and Territory succession law (Recommendation 7). Accordingly, our office requested the ATO to re-consider the complainant’s circumstance in light of recommendation 7.

The ATO re-considered the complainant’s circumstance and, having regard to the IGTO’s review investigation as well as work being progressed to implement recommendations from that investigation, approved release of the estate monies to the complainant.

A complainant approached the IGTO with a concern that the ATO had rejected their application for early release of superannuation on a compassionate ground (ERSB application) without appropriately considering their situation. The complainant had applied to the ATO to access their superannuation early to pay for their mother’s medical treatment. The complainant does not habitually live with their mother or provide domestic support or personal care for her. The ATO rejected their application on three occasions (initial application, informal review, and complaint) on the basis that their mother was not a ‘dependant’ as defined, because the mother was not in an ‘interdependency relationship’ with the complainant. In making that decision, the ATO did not consider whether other forms of dependency may have been present and did not give the complainant an opportunity to provide further information to demonstrate this.

Under regulation 6.19A of the Superannuation Industry (Supervision) Regulations 1994 (SISR), a person may apply to the ATO to access their superannuation early on compassionate grounds (including to pay for medical treatment for the person or their ‘dependant’). The term ‘dependant’ is defined in subsection 10(1) of the Superannuation Industry (Supervision) Act 1993 (SISA). The definition provides that a ‘dependant, in relation to a person, includes the spouse of the person, any child of the person and any person with whom the person has an interdependency relationship’ [emphasis added]. This suggests that the definition of a ‘dependant’ is an inclusive definition, which also covers a ‘dependant’ within the ordinary meaning of that word (e.g., someone who is financially dependent on a person). However, the current ATO web guidance (QC 60034) on the definition of ‘dependant’ for the purpose of compassionate release of superannuation is unclear and may lead to a misunderstanding that it is an exhaustive definition (i.e., a dependant can only be your spouse, your child, or a person with whom you have an interdependent relationship).

As a result of the IGTO investigation, the ATO agreed to review the complainant and their mother’s situation to confirm whether the mother was a ‘dependant’ of the complainant within the ordinary meaning of the word. The ATO also agreed to update its web guidance and internal ATO staff guidance to clarify that a ‘dependant’ for the purpose of compassionate release of superannuation covers a dependant within the ordinary meaning of the word and to ensure ATO officers take a consistent approach in processing future compassionate release of superannuation applications.

The complainant raised concerns about the advice the ATO provided to him regarding his ability to switch the receipt of JobKeeper payments via his casual employer to receipt of JobKeeper via his own Australian Business Number (ABN). The complainant had concerns that this advice was incorrect and caused him to miss out on JobKeeper payments. The complainant had received advice, including via an objection decision, that he could not nominate again for JobKeeper under his ABN because he previously had been nominated under his employer.

As a result of the IGTO investigation, the ATO confirmed it had provided the complainant with incorrect advice. The ATO also then changed its original decision and allowed the complainant to continue receiving JobKeeper payments under his own ABN. The ATO also paid the complainant the JobKeeper amounts he had previously not received.

The complainant was very satisfied that the complaint lodged with our office had resulted in a positive outcome.