The ATO estimates it has safeguarded $45 million in superannuation benefits as a result of its compliance and enforcement activities focused on the illegal early release of retirement savings in the current financial year.
The regulator achieved the outcome by focusing on the establishment of SMSFs in order to illegally access retirement savings benefits.
ATO compliance activity has resulted in 10 per cent of the 12,211 SMSFs established in the first half of the 2019 financial year being reviewed with an illegal early release focus.
Speaking at the recent SMSF Trustee Empowerment Day 2019 in Melbourne, hosted by selfmanagedsuper’s sister publication, smstrusteenews, ATO director Kellie Grant said: “As a result of these reviews, 123 funds had their details withheld from [the ATO’s] Super Fund Lookup, meaning that they were unable to receive payments and rollovers, and there were 329 newly registered self-managed super funds that also had their registration cancelled.
“So this means that around a third of the cases picked up by our risk model process had further action taken and this actually resulted in us being able to protect $45 million worth of super.”
Grant pinpointed several common drivers the ATO had identified that encouraged SMSF trustees to access their retirement savings benefits earlier than they can legally.
“These include people having a desire to access money due to financial stress, loss of job, marital breakdown and growing debts,” she revealed.
“Or they’re individuals who know little about running and setting up a self-managed super fund and they are targeted by unscrupulous promoters.”
She stressed eliminating these activities was important to maintain the integrity of the whole superannuation system.
“When [the establishment of SMSFs to illegally access super benefits] occurs, it undermines Australia’s retirement system and it can place an unfair burden on the community because then those individuals become reliant on the age pension in their retirement,” she said.
The regulator’s continued focus on the illegal early access of superannuation benefits comes after it revealed earlier in the year that in the 2018 calendar year, 257 SMSF trustees were disqualified from 169 funds, with illegal early release of funds and loans to members being the reason for 70 per cent of these actions.