The ATO has reminded superannuation funds they should take prompt action in processing First Home Super Saver (FHSS) release authorities after a review found widespread failure to do so.
The regulator stated it had been reviewing the performance of funds in actioning the release authorities and “found a large number of funds aren’t meeting their obligations to action FHSS release authorities within the required time frame”.
“Our review factored in time for the paper-based release authorities and release authority statement (RAS) forms to move through the post,” it noted, adding funds were required to action all release authorities issued by the ATO within 10 business days of the date of issue.
No extensions were available to the 10-day time frame and the ATO highlighted it was a legal requirement to meet it so fund members could access their FHSS amounts and receive their savings to help them purchase their first home.
Super funds were also unable to return a nil RAS where money was available for release and were still required to action an FHSS release authority even if it had not received any voluntary contributions from the member, as the latter was able to request a release from a fund other than that in which they have made voluntary contributions.
The ATO reminded super funds to review their processes regarding FHSS release authorities to ensure they were meeting the 10-day deadline.
It said it would soon contact funds with a high rate of late release authorities and would conduct follow-up checks in three months to assess if there had been any improvement in fund performance.