How we calculate the estimate
Non-lodging SMSFs
We use a random enquiry program to calculate the illegal early access estimate for non-lodging self-managed super funds (SMSFs).
The non-lodging fund population for a financial year is based on the date of last lodgment and rollovers from other super funds.
We drew separate random samples from SMSFs that had either:
- previously lodged but failed to lodge in 2022–23 (lapsed-lodgers)
- a rollover in 2022–23 but never lodged (never-lodgers).
We calculated an illegal early access estimate for each of these sub-populations.
Lodging SMSFs
We based the illegal early access estimate for lodging SMSFs on analysis of auditor contravention reports (ACRs) received from approved auditors for the corresponding financial year.
Our analysis focuses on identifying the most common illegal early access types (that is, payment standard breaches and loan-to-member contraventions). We add an audit non-detection amount to address the risk that approved auditors may not fully identify all instances of illegal early access.
Combining sub-population estimates
We step through the non-lodging funds method we applied below, and:
- combine the estimates from the sub-populations in Table 2
- lay out the method application for the lodging funds in Table 3.
Method
Step 1: Determine if illegal early access occurred
We conduct audits on the sample of SMSFs to determine if illegal early access has occurred. We review bank statements to identify specific payments. We compare assets in the fund to previous known values to identify unexplained reductions.
Step 2: Sum up individual illegal early access amounts
For lapsed-lodgers and never-lodgers, we separately add up the individual illegal early access amounts where they are greater than zero. We then calculate the average withdrawal amount.
Step 3: Multiply average illegal early access by population
For both lapsed-lodgers and never-lodgers, we multiply the sample average illegal early access amount from Step 2 by the annual populations.
Step 4: Estimate non-detection
For lapsed-lodgers, we apply the other non-detection percentage to the result of Step 3.
Step 5: Combine population estimates
We add the lapsed-lodger and never-lodger population estimates (Step 3) and non-detection (Step 4). This gives us the total non-lodger population estimate.
The following tables show the dollar values at Steps 1 to 5.
The never-lodgers sample average illegal early access is higher in 2022–23 due to the sample illegal early access amounts typically being larger than in 2021–22.
Find out more about our research methodology, data sources and analysis for measuring gap estimates.
Limitations
The following caveats and limitations apply when interpreting the illegal early access estimate:
- ACRs provide limited information on the events reported as contraventions.
- Unrectified contraventions that occurred in previous financial years can be reported in the 2023 ACR. The method included a calculation to exclude payments that occurred in previous years from the 2023 estimate.
- Approved auditors may not detect or not report contraventions (or both).
- The method of the non-lodger estimate calculation excludes from the population SMSFs that ceased lodging prior to 2022.
- ATO audits may not detect all instances of illegal early access.
- Estimated non-detection amounts have been included to address identified limitations of the method.
- Non-reporting in ACRs may also occur because only contraventions that meet the reporting criteria need to be reported.
Return to Self-managed superannuation funds illegal early access.