Illegal Early Access to Super
The Australian Taxation Office (ATO) has issued warnings regarding the risks associated with accessing superannuation illegally.
Here’s essential information on how to avoid the impact of such schemes, safeguarding yourself and ensuring compliance with ATO super regulations.
If you’ve been feeling the effects of inflation for a long time, you may be enticed by the prospect of accessing your superannuation funds sooner than anticipated. The ATO has warned that people known as ‘promoters’ have been capitalising on these circumstances, approaching taxpayers and suggesting that members of super funds can withdraw their super early or use SMSF to pay off debts, purchase a vehicle or fund a holiday.
It is important taxpayers understand that super is governed by strict rules and regulations and you are generally only able to access your super under two circumstances:
- Turning 60 and retiring
- Turning 65 (regardless of whether you’re working)
To access your super early and legally, members’ must meet very strict conditions. Accessing super outside of these conditions is illegal and could have a significant impact on retirement savings.
The consequences of illegally accessing super
Accessing your super unlawfully could lead to significant financial and legal consequences that outweigh the benefits of early access. Here’s some consequences you could face:
- Loss of retirement savings
- Additional income tax, penalties and interest payments
- Disqualification from SMSFs
Being disqualified from an SMSF can affect personal and professional reputation as names of trustee’s are published.
How to avoid super schemes
If a person approaches and requests personal information, such as offering assistance in setting up a SMSF or advising you to transfer some or all of your super from an existing super fund to an SMSF and using such funds for personal expenses, exercise caution. Do not agree to any proposals, sign any documents or provide personal details.
Providing personal information could leave you vulnerable to identity theft or misappropriation of superannuation funds. Be vigilant and safeguard your financial security.
For more information speak with your Simmons Livingstone advisor on 1800 618 800 or via email at admin@simmonslivingstone.com.au
