The ATO has published a guidance note stressing the serious nature of illegally withdrawing retirement savings early, while at the same time reminding SMSF members how they can legitimately access their superannuation benefits.
“As an SMSF trustee, before you release any funds, you must ensure the member has met a condition of release. There are serious consequences for you and your fund if you release super before the member is legally entitled to access,” the regulator warned.
It noted the penalties associated with the illegal early access of super highlighted the serious nature of these breaches as they could result in the disqualification of trustees, having the fund declared non-complying, the imposition of administrative penalties and in some cases prosecution.
“Illegally accessing super early will cost members a lot more than the super they access and may also get them into trouble,” it said.
Its correspondence also specifically warned SMSF trustees about facilitators whose actions could result in an individual illegally accessing their superannuation benefits earlier than allowed.
“Beware of promoters offering to help you or your members withdraw their super early. These promoters often claim you can withdraw your super and put the money towards anything you want – this is not true,” it said.
Conditions of release individuals need to satisfy before retirement savings can be accessed include reaching preservation age and retiring, reaching preservation age and starting a transition-to-retirement income stream, ceasing an employment arrangement on or after turning 60, and reaching the age of 65.