iscoverThe Tax Office tells the industry to alert clients that there are consequences from illegal early access schemes.
Accountants must highlight dangers of raiding super: ATO
03 April 2023
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7 minute read
Accountants need to warn clients about the dangers of raiding super because the ATO is cracking down on illegal early access schemes, it said.
The Tax Office said promoters of such schemes used a range of tactics to prey on unsuspecting victims, such as:
- Encouraging someone to transfer or roll over super into an SMSF
- Targeting the vulnerable, including those under financial pressure or unaware of super laws
- Claiming it is legitimate to access super and use it as required
- Charging high fees and commissions
- Requesting identity documents
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The Tax Office said customers should halt any involvement they had in a scheme and refrain from signing documents or providing personal details.
It said illegally accessing super could have significant financial consequences and could mean someone losing their retirement savings.
Those caught would also have to pay extra tax, penalties, and interest while they could also be disqualified as a self-managed super fund trustee and have their name published online.
The ATO reminded consumers that in general, they could only access their superannuation when they retired and turned 60, or once they turned 65, whether they were working or not.
It said special grounds for early release included:
- Medical treatment or transport for the super holder or their dependant
- Accommodating a disability for the super holder or their dependant
- Palliative care for a terminal illness for the super holder or their dependant
- Funeral expenses for a dependant
- Preventing foreclosure or forced sale of a home
In 2021–22 the ATO released a record $573 million in super with most of the 34,400 approved applications for medical treatment.
The Tax Office said it would impose civil and criminal penalties against promoters of illegal early access schemes including significant fines and terms of imprisonment.
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