New Superannuation Legislation
The Government has introduced further legislation to implement further ‘Stronger Super’ reforms.
Currently, there are no specific promoter penalties under the superannuation law in relation to illegal early release schemes.
Editor: Members of super funds are only allowed to access their super when they satisfy a ‘condition of release’, such as retiring or reaching age 65.
Some people, wrongly, advise members that they can get access to their superannuation earlier, which is illegal, but the promoters can get away scot-free while the member gets penalised.
Under the proposed new laws, promoters of illegal early release schemes will face civil and criminal penalties including a fine of up to $340,000 (2,000 penalty units) and/or imprisonment of up to 5 years.
Other reforms introduced include:
- taxing superannuation benefits that are accessed illegally at the rate of 45%;
- giving the ATO effective, flexible and proportionate powers to address wrongdoing and non-compliance by SMSF trustees (e.g., by issuing them with personal fines, or directing them to undertake certain actions); and
- capturing roll-overs to SMSFs as a designated service under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, to ensure superannuation benefits are not being used for illicit purposes.