ATO, Superannuation

Super payment delays likely due to SMSF issues

early access SMSF

An SMSF unable to secure early access to superannuation money is likely to have issues within the funds, including outstanding returns, says the ATO.

SMSF members struggling to receive early access to their superannuation under COVID-19 relief measures have been told failures to meet legal obligations are the most likely reasons for the delay.

In an update posted to its website, the ATO recognised some SMSF members who were requesting early release of super were unable to see their fund in the list of available funds on the myGov website.

In its response, the regulator noted three of the four reasons were connected to issues related to the fund and only one was due to internal processing by superannuation authorities.

“This can happen if the SMSF has overdue annual returns, has a trustee that has been disqualified, has a deregistered corporate trustee,” it stated, adding the remaining reason was where a fund was newly registered and the registration process was not yet complete.

“As it can take over a month to process a SMSF registration, the quickest way for members to access their money under COVID-19 early release of super is to apply to have the funds released from their Australian Prudential Regulation Authority (APRA) fund, via the automated process in myGov.”

It added SMSF members who could not find their fund on myGov could make direct contact with the regulator, which could assist with the early release application.

This was confirmed by ATO SMSF segment assistant commissioner Dana Fleming during a recent webinar hosted by the Institute of Public Accountants. Fleming told the webinar overdue lodgements did not make an SMSF member ineligible for early release.

“You can still apply for early release, but you have to call us and go through an identity check and an application will be manually keyed over the phone,” she said, adding SMSFs should ensure returns are lodged to remain on the Super Fund Lookup Service.

In related news, the ATO also indicated an early release application could be cancelled at the fund level, but a determination by the regulator could not be varied or revoked.

The regulator had already stated in March as part of its initial guidelines for early access that there would be no changes or revocations to a determination once a super fund member had applied for early release, except in the case of a genuine error.

However, in an update for APRA-regulated funds, it stated a super fund member could cancel a payment coming from their fund.

“If an individual contacts their fund and says they don’t want the payment anymore, the fund can act on the member’s direction,” it noted.

“Funds should confirm the member understands they will not be able to apply again in this financial year (or at all if they applied on a temporary resident category).”

The update, which did not reference SMSFs, also stated superannuation funds did not have to confirm the payment cancellation with the ATO.

Copyright © SMS Magazine 2024

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital