Don't be conned: Early access to super is not on
For several years now the Australian Tax Office (ATO) and the Australian Securities and Investments Commission (ASIC) have been warning the public about a common scam involving getting illegal early access to superannuation.
The deal with any super savings is that in return for favorable tax treatment, your money needs to be locked away until you stop working. There are only a few circumstances that allow you to get your hands on your super early and these include pretty desperate things like dying or suffering from a terminal medical condition.
The typical illegal early release scam works like this:
- Someone approaches you, or you may see an advertisement, offering to organise access to super savings;
- The offer to do so will generally be made in order to help you “pay some bills”, “buy a car”, “go on a holiday” or some such thing;
- The scam promoter will also want to charge a commission based on the amount accessed and this is often around 30% of the transaction;
- The scammer will do all the paperwork and usually arrange for a transfer of your super from a legitimate fund into a sham fund;
- Once in the sham fund the scam promoter will deduct the commission and then pay you the remainder. They never explain to you that what just happened is illegal and that once the Tax Office finds out, you will have to pay tax on the entire amount that was removed from super, plus penalties;
- Even worse, you may not realise it, but you have just shared all your proof of identity with a criminal. They now have all the information needed to steal your identity.
The ATO, ASIC and the Australian Prudential Regulation Authority (APRA) plus the state police departments are all working to put a stop to superannuation fraud. Once these criminals have your identity details you run a real risk of your identity being used in other frauds. Cleaning up the mess after this happens can often take years.
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