As cost of living pressures push Australians to make tough financial decisions, the tax office has issued a new fact sheet reminding superannuation fund members — and self-managed super fund (SMSF) trustees — that unauthorised early access to super is illegal.
In most circumstances, super can only be accessed once a super fund member retires and turns 60, or reaches the age of 65.
On Monday, the Australian Taxation Office (ATO) reminded superannuation fund members to be wary of misleading ‘promoters’ who say they can roll superannuation balances into a new SMSF and distribute the proceeds before it is permitted.
These ‘promoters’ allege those early distributions can help super fund members pay off debts, or spring for a holiday.
“We want members to know illegal early access to super has serious consequences,” the ATO said.
Those found to have illegally withdrawn their super can face severe tax and interest implications, and penalties related to the provision of false and misleading documents.
Superfund members can also have their identity stolen and put their retirement savings in jeopardy if they provide too much information to a dodgy super scheme ‘promoter’.
The ATO has particular ire for those ‘promoters’, reminding crooked operators they could be permanently disqualified from being an SMSF trustee.
Those warnings over early withdrawal are also pertinent for small business entrepreneurs who choose to manage their own retirement savings through an SMSF and may be tempted by an early withdrawal.
As the ATO warns against improper access to retirement savings, it has also outlined the raw scale of the problem.
In excess of $600 million was illegally withdrawn by SMSF trustees between 2020 and 2022, ATO deputy commissioner of superannuation and employer obligations Emma Rosenzweig said in February.
The ATO fact sheet can be found here.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
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