Thousands of first home savers could have their dreams of home ownership dashed after an IT glitch at the Australian Taxation Office delayed funds promised from the Federal Government.
The funds are due to be paid into First Home Saver Accounts, which are part of a scheme launched by the Government in 2008 to encourage private savings and put downward pressure on inflation.
Under the scheme the Government contributes $850 for the first $5,000 of individual contributions made each year.
A spokesperson for the ATO admitted payments have been delayed, telling iTnews that in early November the Tax Office "identified a problem with the Tax Office’s First Home Saver Accounts IT system and all affected payments were stopped until we were confident the problem had been fixed.”
The spokesperson was unable to detail the exact nature of the problem, or when it is likely to be rectified.
The Tax Office has 60 days after First Home Saver Account holders have lodged their tax return to pay the funds to the financial institution administering the account, after which the financial institution then has 28 days to deposit the money into the taxpayers account.
The ATO says it is working urgently to fix the problem to ensure affected contributions are paid within the 60 day deadline, however the financial institutions managing the accounts are starting to receive questions from concerned customers.
Of the big four banks, only ANZ and the Commonwealth Bank offer the First Home Saver accounts, along with 14 credit unions including NSW-based Teachers Credit Union.
A spokesperson for the Commonwealth Bank admitted there has been a delay with the First Home Saver Account government contributions due to technical problems experienced by the ATO.
“The Bank is working closely with the ATO to credit these contributions to Commonwealth Bank customers’ First Home Saver Accounts as soon as possible, and we apologise for the delay and inconvenience caused” she said.
Teachers Credit Union chief executive officer Steve James said the institution had received a number of complaints from customers in recent weeks as a result of the delay.
The credit union is also seeking further information from the ATO following the receipt of funds which have not been connected to individual customers.
“We recently received a lump sum from the ATO as the co-contributions for our customers, but have not yet received the vital information which would enable us to allocate the correct amount to each First Home Saver Account. We’ve been informed that they hope to provide this information to us before Christmas,” James said.
“We understand the ATO’s IT system has had some teething problems dealing with the disbursement of the co-contribution, as this is the first time it’s been done.”