An ATO review of SMSFs registered during the 2020 financial year stopped almost $130 million from leaving the superannuation system due to illegal access, the regulator has said.
During today’s Chartered Accountants Australia and New Zealand National SMSF Conference Online 2020, ATO SMSF segment assistant commissioner Justin Micale said the ATO’s secure front-door compliance program responsible for monitoring newly registered SMSFs prevented illegal access to over $126 million in retirement savings during 2019/20.
“During the 2020 financial year, 22,000 new SMSFs were registered. This represents a 7 per cent increase as compared to the previous financial year. Of these newly registered SMSFs, 20 per cent were reviewed by our teams, resulting in over $126 million in retirement savings being stopped from leaving the super system,” Micale said.
Following the ATO’s decision to pause most of its mainstream audit and review compliance activities in March in an effort to support the sector during the height of the COVID-19 pandemic, he said a key focus of the ATO’s regulatory stance moving forward would be its secure front-door compliance program.
“The purpose of this program is to only allow genuine trustees into the SMSF sector to ensure that retirement savings are not illegally accessed,” he said.
“The illegal early release of super is a growing area of concern for the ATO, which is why we pay close attention to new registrants in the SMSF system.”
He also noted the ATO’s assessment of new registrations had revealed a jump in new SMSF registrations at the start of the COVID-19 pandemic.
“We have risk rules in place to assess all SMSFs as they register or when a new member joins an existing fund,” he said.
“Interestingly, and somewhat concerning, there was a jump in new registrations during March and April this year. This spike in registrations coincided with the outset of the pandemic, obviously a period of time where share markets dropped and fears over job security increased.”
In September, ATO SMSF approved auditors portfolio director Kellie Grant said the vast majority of applications for COVID-19-related early access to superannuation from SMSF members had been legitimate.
