Early Release Scams

The ATO has warned super investors against using scams to access their super before retirement.

As a general statement super benefits can only be accessed (ie cashed out as a lump sum or taken as a pension) in limited circumstances associated with retirement such as
• attaining age 65
• attaining preservation age and being retired
• attaining preservation age and taking a benefit in the form of a transition to retirement income stream; or
• becoming permanently incapacitated.

In very limited circumstances can benefits be accessed before preservation age.

Scams involving early access usually involve rolling the benefit into a SMSF controlled by the scammer who, for a substantial fee (20% or 30% of the benefit), then simply pays the benefit out of the controlled SMSF.

These scams are not tax effective and, in addition to paying the scammer’s fee, will result in the imposition of penalty tax on top of the scammer’s fees.