The ATO is warning that scammers promoting illegal early access to superannuation schemes are operating in the suburbs of Australia.
The ATO says that it has become aware that there are people in the suburbs of some of Australia’s major cities who are encouraging the illegal early access of superannuation. ATO Deputy Commissioner James O’Halloran said the ATO didn’t want to see retirement savings being put at risk by “unscrupulous promoters”.
“Attempting to access your super early in this way is illegal, and people need to be aware of the financial dangers of falling prey to these promoters. These people could cost you a big part of your hard-earned retirement savings,” he said.
According to the ATO, it has evidence that promoters are promising they can arrange access to superannuation, for a fee. People are seemingly being told they can use the amounts illegally accessed to buy a car, pay down debts or to take a holiday. They are asked by the promoters to fill out blank forms and provide identify documents, while being assured that the early access arrangements are legitimate.
The promoters are apparently targeting people with small to medium superannuation balances and people involved in the local community or cultural groups.
“While we have seen these promoters using word of mouth and focused in some geographic areas, such as Western Sydney, and among some communities, we believe it is not widespread at this stage – but it is important for the ATO to get this warning out as early as possible, given the significant loss people could face to their retirement savings,” said Mr O’Halloran.
The ATO says that people approached about accessing superannuation early should not sign any documents or provide any personal details, to stop any involvement with people or organisations involved in the scheme and seek advice from a professional or from the ATO.
Generally accessing superannuation is limited to once age 65 is reached, or reaching ‘preservation age’ and retirement – though there is legal early access to superannuation in some situations.
Update: The ATO has since also warned SMSF trustees about the consequences of being involved in illegal early access schemes:
“Illegal schemes will cost members a lot more than the super they access, and may get them into trouble.
As a self-managed super fund (SMSF) trustee, you must ensure that the member has met a condition of release before you release any funds. There are severe consequences for you and your fund if you access your super before you are legally entitled to do so.”