The amount of money leaving the superannuation system via illegal early release has fallen marginally, but remains an area of concern for the ATO, which has noted advisers may be complicit in structuring loans from SMSFs to allow this access.
ATO commissioner Rob Heferen told attendees at the SMSF Association National Conference 2025 in Melbourne today that the regulator’s illegal early access estimate for the 2022 financial year was $251.1 million, while a further $231.7 million was accessed through prohibited loans by an SMSF.
Heferen noted the first figure was a slight decrease on the $256 million estimated for the 2021 financial year, but the latter was an increase on the $200 million estimated for the same period.
Speaking during another session, ATO superannuation and employer obligations deputy commissioner Emma Rosenzweig noted the combined total of $481.8 million remained a key area of concern and showed some trustees were using their SMSFs as a source of funds, particularly if they were unable to access money elsewhere.
“As well as the blatant illegal early access, we’re seeing worrying levels of breaches and conditions of release through loans to members,” Rosenzweig said.
“Loans to members are prohibited by the Superannuation Industry (Supervision) (SIS) Act and constitutes a serious contravention.
“Worryingly, we’ve seen some advice from advisers that implies if the early access is done in the form of a loan, it’s somehow less bad.
“Even more worrying, we’ve seen some suggestions of ways to retrospectively make an illegal access of superannuation look like a loan by putting in place documentation that is backdated and is behaviour which could constitute fraud.
“A loan to a member is just as serious a breach as accessing benefits early without having a loan agreement in place.
“Neither of these breaches of the SIS Act should be encouraged. An SMSF cannot be used to prop up the cash flow of your business, to pay for a holiday, a car, or worse, to support a gambling habit.”
