Have you ever been offered help to withdraw your superannuation (super) savings early?
Generally, you cannot access your super until you retire.
Some people promoting illegal super schemes will tell you that they can help you access your super savings now for reasons like paying off credit card debt, buying a house or car, or even going on holiday.
These schemes are illegal. They will cost you a lot more than you expect and get you into a lot of trouble.
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If you are approached about a scheme, you should contact us on 13 10 20 immediately to make sure that your super savings are protected.
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What is super?
Super is money saved for your retirement.
This money is not meant to be used for things you need now.
Your super is protected by law for your retirement.
How illegal super schemes work
These schemes usually involve a promoter offering to help you access your super early.
They offer to transfer your super savings from your existing super fund to another type of fund (mainly a self-managed super fund, also known as an SMSF) and may claim that you can use this money for anything you want. They’re lying.
Taking your money out of your SMSF before you are allowed is illegal.
Promoters can charge fees of up to 30% or even take all of your super savings.
Illegal super schemes may lead to identity theft
If you participate in one of these schemes, you may become a victim of identity theft.
Identity theft happens when someone uses your personal details to commit fraud or other crimes.
People have had their identity used to open fake bank accounts, set up super funds and have their super savings stolen.
Once your identity has been stolen and misused, it can take years to fix.
When you can legally access your super
Generally, you can only access your super savings when you reach retirement age and stop working. Currently, in Australia, the retirement age is 55 for those born before 1 July 1960. It then increases gradually. For anyone born after 30 June 1964, the retirement age is 60.
There are some special circumstances where you can legally access your super savings early. These include medical conditions or severe financial hardship.
To find out if you can legally access your super early, contact your super fund.
For further information about whether you are eligible to access your super savings early or for a copy of the application form:
- contact your super fund
- visit the website of the Australian Prudential Regulation Authority (APRA) at www.apra.gov.au
APRA are the government regulator for the financial services industry. They administer the very limited circumstances where benefits may be released on specified compassionate grounds and provide information on their website about accessing your super early.
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You do not need to pay a fee to anyone to apply to use your super savings early.
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Penalties for illegally accessing your super early
Severe penalties apply for illegally accessing your super early. You will have to pay tax on the money you access early. There may be other penalties, depending on your involvement in the scheme.
If you have been involved in a scheme, you should contact us immediately. We will take your voluntary disclosure and circumstances into account in determining any penalties.
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In the worst case scenario, if you set up an SMSF and knowingly access your super savings, you may also face a fine of up to $220,000 and a jail term of up to five years.
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Promoters may receive significant fines and go to jail.
They will be prosecuted by us and/or the Australian Securities and Investments Commission (ASIC).
Tell us about illegal schemes
If you have been approached by anyone telling you that you can access your super early:
- stop any involvement with the scheme, organisation or the person who approached you
- do not sign any documents
- do not provide them with any of your personal details
- urgently phone our information line on 13 10 20 and advise us of your situation.
More information
For more information about when you can and can’t access your super early:
Last Modified: Tuesday, 9 March 2010
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