ATO and ASIC alert investors to early super release scams
By Ben Abbott
Investorshave been warned against illegal schemes promising access to their superannuation before retirement by theAustralian Securities and Investments Commission(ASIC) and theAustralian Taxation Office(ATO).
A joint statement warns that under these scams, promoters indicate to clients they will be able to decide how their superannuation assets are spent if they set up a self-managed superannuation fund (SMSF).
ATO taxation deputy commissioner Mark Jackson says the promoter then charges a commission to roll the funds over to the new vehicle — usually 20 per cent or more of the fund’s assets.
ASIC executive director of consumer protection Peter Kell says the promoters claim people can use their super funds to pay debts, make a deposit on a home, or buy a car or holiday, with money stolen in the worst cases.
Kell says these types of schemes target people on low incomes, in financial difficulty, and those having trouble paying their phone bills, credit cards or mortgages.
He says promoters also single out retrenched workers and those living in rural and remote communities, particularly farmers and indigenous people.
“If people need early access to their superannuation on compassionate or extreme financial hardship grounds, they do not need to pay a promoter,” Jackson says.
Legal early access to superannuation, all free of charge, can still be obtained by the trustee of a superannuation fund releasing money on grounds of financial hardship or the early payment on compassionate grounds being approved by theAustralian Prudential Regulation Authority.
Recommended for you
Licensing regulation should prioritise consumer outcomes over institutional convenience, according to Assured Support, and the compliance firm has suggested an alternative framework to the “licensed and self-licensed” model.
The chair of the Platinum Capital listed investment company admits the vehicle “is at a crossroads” in its 31-year history, with both L1 Capital and Wilson Asset Management bidding to take over its investment management.
AMP has settled on two court proceedings: one class action which affected superannuation members and a second regarding insurer policies.
With a large group of advisers expecting to exit before the 2026 education deadline, an industry expert shares how these practices can best prepare themselves for sale to compete in a “buyer’s market”.
