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  • Why would you do it? Illegal early release

    One of our current compliance focus areas is the illegal early release (IER) of super. Over the past year, we’ve targeted individuals and promoters who register self-managed super funds (SMSFs) with the intent of using the fund to illegally access super benefits.

    In the 2019 financial year we took action against a third of cases picked up by our risk models. We withheld the details of 352 funds from Super Fund Lookup (SFLU), meaning they couldn't receive payments and rollovers. We also cancelled the registrations of 609 newly registered SMSFs.

    Common drivers for IER are financial stress, desire to spend on a present-day benefit, and people with little or no knowledge of SMSFs being targeted by unscrupulous promoters.

    If it looks too good to be true…

    In a recent case we observed an organisation, not licensed to provide financial advice, setting up stalls outside major supermarkets inviting people to 'come talk to us and start an SMSF; use it to go on holiday, buy a home etc'. We employed social media to target people in the demographic the spruiker was targeting and, with the help of the Australian Securities and Investments Commission (ASIC), had the organisation shut down.

    There are severe consequences for you and your fund if you access your super before you are legally entitled to do so. These could include:

    • disqualification of trustees
    • the fund being made non-complying
    • administrative penalties
    • winding up the SMSF
    • prosecution.

    If any of your members have been involved in a scheme, contact us immediately on 13 10 20.

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      Last modified: 16 Jul 2019QC 59674