Why has the change been made?

The change has been made as part of the Government’s crackdown on illegal early release schemes.

It seems that early release scheme promoters often establish SMSFs as a means by which benefits can be transferred from other funds, passed through the newly established SMSF, and then simply paid out to the member (in breach of the payment standards).  This process takes place within a matter of weeks and the SMSF is often simply discarded.

By identifying newly established SMSFs as registered, it is hoped that trustees who have received requests to transfer benefits to such funds will be particularly cautious in determining the bona fides of the request.