Illegal attempts to access your superannuation.
The ATO is sending out a warning to be aware of scammers who are illegally attempting to encourage people to access their super early.
Although this scam is not widespread at this stage, the ATO is concerned it could develop out of hand rapidly if the alert is not raised.
The ATO has seen evidence of promoters promising that they can organise access to their super (for a fee) to cover bills or to provide money to family members.
The scammers, then ask people to fill out blank forms and provide identity documentation, while assuring people that these arrangements are legitimate.
Deputy Commissioner James O’Halloran said, the ATO would hate to see the safeguards protecting people’s retirement savings be tampered with, leaving people with nothing for the future.
“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”.
To date, attacks have been mostly targeted towards people with small to medium super balances, people involved in local community and cultural groups, and those who may not have engaged with their super at all before being approached.
Deputy Commissioner O’Halloran said attacks have been localised to geographic areas such as Western Sydney and some community groups, but also stated, “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”.
Generally, you can only access your super once you turn 65 or when you reach preservation age and stop working. There are some very limited circumstances where you can legally access your super early. You can read more about these circumstances on the ATO website here:
If you are approached by someone telling you it is possible to access your super early, remember:
- Do not sign any documents
- Do not provide them with any of your personal details
- Stop any involvement with the scheme, organisation or the person who approached you
- Seek advice from a professional advisor
To help you understand the way these promoters can trick you into providing your personal details and illegally accessing your super, the ATO has created this case study.
John is 45 years old and a member of an APRA-regulated superannuation fund, which his employer makes contributions to and he has a super balance of $60,000.
John has outstanding bills and he wants to send money to support his family who live oversees however, he can’t afford to do any of this.
A friend at work tells him he knows a person, Mark who can help access his superannuation for a fee. John is interested so he meets with Mark.
Mark reassures John that it is okay to access his super and all he has to do is set up a self-managed superannuation fund (SMSF) which he can do for him for a fee of $1,000.
Mark asks John to sign some blank forms including:
- roll-over form for his APRA-regulated fund,
- an SMSF trust deed,
- trustee declaration,
- application to open an SMSF bank account,
- investment strategy, and
- an election to become a regulated SMSF with the ATO.
John also provides copies of his license and some other personal identification to Mark.
Mark sets up an SMSF for John and rolls over the $60,000 from his APRA regulated super fund.
John then starts drawing money out of his SMSF bank account to pay bills, including the $1,000 to Mark for his services, and to send money overseas to his family to help them out.
Since John was not eligible to access his super early the $60,000 that he withdraw from his SMSF is treated as assessable income by the ATO and John is taxed at his marginal tax rate. The ATO also apply an administrative tax shortfall penalty at 75% for intentional disregard of the law of approximately $15,000. They also disqualify John from being a trustee of his SMSF.
If you think you may have been scammed by a provider and have maybe accessed your super illegally please call us on (02)4353 2333 to see how we can assist you.
Or you can use the form below to get in touch.