Warning: This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.
8 August 2011
During difficult financial times it might be tempting to access your superannuation savings early. However unless you meet strict conditions it is illegal and can cost you more than you think.
The ATO is concerned about the number of illegal schemes being promoted that offer people access to their super savings early.
People who offer easy access to your superannuation, usually for a substantial fee, may not be telling you the whole story and should not be trusted.
Promoters of these schemes typically take advantage of people with a limited understanding of how super works and charge large fees or commissions in order to gain access to your super and will say you can access your super earlier than you are entitled to.
These schemes are illegal and you could face penalties as well as jail time - long after your money is spent.
You may also find yourself the victim of identity fraud where promoters steal a person's identity and their superannuation benefits. These thefts can go un-noticed for some time and cause long term problems for the individual in obtaining finance in the future.
If you have entered into an arrangement that sounds similar to these schemes it's important to contact the ATO as soon as possible. Talking to us voluntarily means you may be entitled to a reduction in any penalties that may apply and we might be able to protect your identity from being used in other illegal activities.
Last financial year the ATO identified over 1,280 people involved with illegal schemes to access super early and assessed them for an additional $9.4 million in tax and penalties.
The Commonwealth Director of Public Prosecutions and the Australian Securities and Investments Commission have successfully prosecuted four promoters over the past 12 months who received jail sentences.
It's important to think carefully before entering into arrangements that offer easy access to your superannuation benefits. In addition to paying excessive fees or commissions (sometimes in excess of 30% of your super balance) you could be taxed at rates as high as 46.5%.
You may access your super early if you are experiencing financial hardship or have strong compassionate reasons, talk directly to your super fund and they will advise you what to do next.
If your circumstances allow you to legally access your superannuation benefits this will usually be free or cost a nominal fee and you do not need to pay any third party to help you.
If you have been approached by a scheme promoter to access your super early, or have information about people making such an offer, call the ATO on 13 10 20.
If you don't speak English well and want to talk to a tax officer, call the Translating and Interpreting Service on 13 14 50 for help with your call.
For more information about these schemes visit www.ato.gov.au/superschemes
Last Modified: Monday, 8 August 2011