SMSF auditors have been encouraged to inform the ATO of any schemes trustees may have used to gain early access to superannuation, as ASIC reported advisers may also been involved in similar attempts.
ATO SMSF segment assistant commissioner Dana Fleming said the regulator was aware of schemes in which superannuation fund members withdrew $10,000 and then made an equivalent contribution via salary sacrifice to secure tax arbitrage.
Speaking as part of a recent webinar hosted by the Institute of Public Accountants, Fleming said auditors had a role to identify any ineligible attempts to secure the early release of funds.
“If an auditor suspects that an SMSF member has engaged in a contrived arrangement, that is a scheme, to meet eligibility criteria, they can advise us through completing section G of the auditor contravention report or if they wish to remain anonymous, I encourage them to use our whistleblower tip-off form on the ATO website,” she said.
“From an auditor’s perspective, if they have concerns there is a scheme, or broader activity, please let us know and we will take action, but their fundamental role is to check eligibility criteria and we don’t expect them to be a detective as to what is going on in the background.”
She added the ATO was not only examining individual claimants, but also promoters of schemes to secure access to the early release relief program.
“These are schemes and we take a dim view of individuals who are violating the intent and purpose of that measure to manufacture a tax benefit when it is there to support people who have been financially impacted by COVID-19,” she noted.
Fleming’s comments echo those of ASIC superannuation senior executive leader Jane Eccleston, who said advisers were actively involved in encouraging people to claim early access to superannuation.
Eccleston made the claim in an article on ASIC’s website on the issue of finding and consolidating lost superannuation, and said that in cooperation with the ATO it had identified financial advisers, trustees and fund promoters who were marketing ‘free’ lost super and consolidation services searches.
The article added that the COVID-19 early access scheme was being added to the services promoted by some within these groups and the corporate watchdog was reviewing their behaviour.
“ASIC is concerned that some advisers may use the current uncertainty from COVID-19 as part of their pitch to consumers to carry out broader superannuation activities, such as the possibility of early release of superannuation, searching for lost super and consolidating their accounts,” it said.
“ASIC has already seen some ‘lost super search providers’ rebrand as ‘COVID-19 access providers’. This is an area we will be monitoring closely for misconduct.”
Early access to superannuation was granted as part of COVID-19 relief measures announced by the government in March which led to the SMSF Association warning people to use the scheme carefully and SMSF experts highlighting that ‘gaming'”the scheme would be quickly identified by regulators.