Risk alert: scammers steal self-managed super

Illegal scheme promoters advertise they can help people access their super early by establishing a self-managed superannuation fund.

The greatest threat to the integrity of self-managed funds comes from people who work with a scheme promoter to set up a fund with the sole intent of accessing their super savings early.

Tax Office Deputy Commissioner (Superannuation) Neil Olesen said it is illegal to access your super before you retire, except in very limited circumstances. These limited circumstances can include medical conditions or severe financial hardship.'

'Illegally accessed super is treated as income for tax purposes in the year it is withdrawn and comes with stiff penalties,' Mr Olesen said.

'We are working closely with the Australian Securities Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) to strengthen the rollover process from large super funds to self-managed super funds.

The Tax Office is further toughening the proof of identity requirements for registration of self-managed funds.

Close scrutiny by regulators and the super industry, and a robust regulatory regime, helps ensure illegal schemes don't succeed. This approach has already resulted in $1.7 million of super savings being frozen.

'We want to make it harder for people to illegally access their super early,' said Mr Olesen.

'Raising awareness about these schemes and the severe penalties is a priority.'

Protect your identity

Super savings could also be at risk from thieves using stolen identities to set up self-managed funds.

Identity thieves are using other people's details to register a self-managed super fund then arranging to roll victims' other super savings into bogus funds.

Posing as the trustee of the fraudulently established fund they then allegedly withdraw the savings and disappear.

Mr Olesen said we are in the very early days of investigating this risk to super savings.

'While the extent of this activity is still being explored, it is a timely reminder for people to safeguard their identity details.'

Keep your super safe

Protect your super:

  • regularly check your super statements and contact your fund if there are any discrepancies, and
  • only act on the advice of super professionals - ensure you understand all your responsibilities before establishing a self-managed super fund.

Protect your identity details:

  • don't carry them in a purse or wallet or store them in a mobile phone
  • shred or destroy documents containing identity details before disposal
  • install up-to-date anti-virus software on your computer, and
  • only provide identity details to trusted or reliable individuals or organisations.
  • For more information on protecting your identity visit the Tax Office website at www.ato.gov.au/identitycrime

If offered advice or assistance on early access to super, contact:

  • your super fund
  • the Tax Office Super Line on 13 10 20
  • APRA on 1300 131 060, or
  • Crime Stoppers on 1800 333 000 or

    (for anonymous reporting of criminal activity).

For more information on legal and illegal access to super, visit:

    Last modified: 28 Jan 2010QC 28247