Finance
First home buyer’s superannuation mistake exposes ‘widespread’ ATO problem
First home buyer Jessica Ricci was just trying to save a little extra money through her superannuation in a federal government scheme intended to help people like her. But an error from tax authorities has left her paying more tax than the top income bracket on some super contributions – ironically having the exact opposite of the intended effect of the policy.
As a result, she’s lost out on an extra $2,250 in savings that was supposed to go to her house deposit. While the ATO pushed back over who was at fault for the mix-up, her case has highlighted an increasingly problematic blindspot when it comes taxpayers getting the short end of the stick when dealing with tax authorities.
“I’m definitely feeling a little bit helpless,” she told Yahoo Finance. “There’s not a clear path to rectify this.”
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Jess was tipping extra money into her superannuation as part of the First Home Super Saver Scheme which has been running for years and allows eligible first home buyers to take advantage of the tax benefits of their retirement savings and then pull those extra contributions out to use for a house deposit.
As part of the scheme, individuals need to apply to the ATO, which in turn requests the related money from the person’s super fund.
Over four years, Jess contributed the maximum $50,000 amount, ensuring not to exceed the $15,000 yearly cap. She did so with the expectation of claiming the benefit at the time of her house purchase, as per the rules of the scheme.
When she went to make the claim, much of the information was auto-populated by the ATO website. And after receiving her funds, and the amount being less than expected, she soon discovered that her first contribution was wrongly classified as a concessional contribution, meaning $2,250 was, in the words of an ATO official, “retained by the ATO as withholding tax”.
She has spent months going back and forth with tax officials trying to get the money she believes should be owed to her.
“They’ve all taken the same stance, which is; ‘Well, yeah, we made a mistake, but you didn’t catch it. You said that what we provided you was fine, so it’s your fault’.
“I think it’s crazy to put the onus or the burden on the average person. I think most people would rightfully assume that pre-filled data provided by the ATO would be accurate,” she said.
The UK’s financial regulator should consider expanding its oversight to cover advanced artificial intelligence models used in financial services, according to a review commissioned by the Financial Conduct Authority (FCA), as policymakers assess whether existing rules can keep pace with rapidly evolving AI technology.
The Monetary Authority of Singapore (MAS), the city state’s central bank and financial regulator, has joined forces with major financial institutions and FinTechs to release a white paper aimed at keeping AI agents in finance operating within safe limits.
The paper, called Safeguards for Agentic Finance at Runtime (SAFR), lays out an industry-built framework designed to let AI agents perform financial tasks in a manner that is safe, secure and dependable. It has been produced under BuildFin.ai, the MAS programme that backs the responsible creation and rollout of AI tools across the financial sector.
The push comes as AI agents take on more autonomous work at a pace that makes hands-on human oversight impractical. In response, firms require real-time controls that keep agent behaviour inside the mandates, policies and risk limits they have defined. SAFR answers this with a series of governance checkpoints that check and log each action an agent proposes before that task is carried out.
The framework extends the AI Risk Management toolkit created through MAS’ Project Mindforge, concentrating on how protections can be put into practice at the moment an agent acts. The white paper maps out how measures such as policy bound execution, real time validation, auditability and interoperability can be woven into system operations, giving institutions the confidence to deploy agents consistently.
Industry participants have already tested SAFR in several settings. These include agent-assisted payments and treasury work, where agents handle routine transactions inside set mandates to cut friction and lift efficiency; wealth management and advisory processes, where agents examine documents and produce structured assessments within tightly defined task limits to speed up compliance reviews; and client engagement, where agents create insights and draft materials within approved content boundaries so staff can serve clients more productively.
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Talking about finances can be stressful, but it’s even more stressful if you’re not sure what advice is good and what advice might put you in a worse position than you started in.
Recently, a Reddit user who goes by market_vision1 asked, “What is the worst financial advice people still repeat?” I took out a little pen and paper while I was reading through these, like, “Lemme write that down. And that. Oh! And that, too!” I’m curious what you think, though. Are all of these things we should avoid financially?
1. “One of the more damaging ideas out there is ‘Oh, you’re young, don’t worry about money, just go have fun and worry about it when you are older.’ Of course, the number one regret I hear from clients nearing retirement is that they wish they had just started saving when they were younger.”
—u/hems86
2. “The ‘tax bracket’ myth should be illegal. My uncle turned down a $10K raise because he thought he’d ‘lose money.’ He literally paid $10,000 to avoid $2,200 in taxes. That’s not a tax strategy. That’s a $7,800 donation to the Dumba— Fund, and he’s the chair.”
—u/Serious_Cress5040
Related: “31 Things Only Super Wealthy People Can Buy That You Probably Don’t Even Know Exist”
3. “People living outside of their means and not realizing it. They say things like, ‘You deserve X, don’t settle for less.’ Most of the people I see who are broke are not 100% victims of the system. The majority of people waste their money on dumb stuff that they can’t afford. They’ll tell me they’ve cut out all unnecessary spending, but when I look at their actual expenses, I see otherwise. Spending $800 a month on DoorDash, financing a new car with a $900 monthly payment, going on international vacations, spending 70% of their income on rent in a fancier apartment when there are options for cheaper living.”
—u/hems86
4. “I’m a financial planner, and some of the worst advice I’ve ever heard is ‘Don’t pay off your credit cards in full. Carrying a balance on your credit card builds your credit; paying it off every month hurts your score.’ People say this to me all the time when I ask why they carry a balance on their card with 25% interest when they have more than enough to pay it off.”
—u/hems86
5. “It’s not so much advice as it is a financial choice. I know people who are taking out 96-month loans on cars they never should’ve considered in the first place, just because they can make the car note when it’s stretched over eight years. They never considered the interest on the loan plus the rate cars depreciate and are befuddled when they can’t afford to trade it in.”
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