Recently, the Australian Taxation Office (ATO) released an article warning people about the illegal super schemes operating in Australia, helping people to illegally access their superannuation early. You can read it here.
Beware of anyone offering to help you withdraw your superannuation early. Generally, you cannot withdraw or access your superannuation until you reach your preservation age and retire, or meet a condition of release or until you turn 65 years of age. See conditions of release listed below. The superannuation legislation is clear; you cannot get your super early unless you meet one of the conditions of release. The people who operate these illegal schemes will tell you they can help you accessing your superannuation before you retire which is illegal. They generally target people who are in a desperate situation and need the money to pay debts. They are profiting by charging you a high fee to assist you getting your super out.
According to the ATO, the illegal scheme promoters usually:
- Encourage you to transfer your super from your super fund into a self-managed super fund (SMSF) to access your super before you’re legally entitled to ;
- Claim that you can use your super for anything you want – which isn’t true; and
- Charge high fees – you risk losing some or all of your super to them.
How this works is that the scheme promoters encourage you and help you to rollover or transfer your super into an SMSF. From there, they illegally take the money out and charge you a hefty fee.
To help protecting your retirement savings, the ATO is working with superannuation funds in Australia to stop these illegal activities happening. They are generating awareness of these activities, reviewing and assessing new SMSF set up process, and working with the super industry to strengthen the rollover process.
Here is a list of ways that you can access your superannuation. This is called conditions of release:
- When you turn 65 years of age or over regardless of your employment status.
- When you turn 60 years of age and change employment.
- When you reach your preservation age and retire from work.
- If you have any unrestricted non-preserved component (see you latest statement if you have any)
- Under severe financial hardship. You have to meet strict criteria.
- Under compassionate grounds. You have to meet strict criteria.
- Permanent incapacity.
- Suffering terminal medical condition.
- Temporary Australian resident leaving Australia permanently.
- Cease employment with a participating employer and have an account balance under $200.
For more information on how you can access your superannuation, see this article Conditions of Release: when can you access your superannuation?
If you have any questions about accessing or transferring your superannuation to another fund, you should contact your fund and discuss with them first.