Text version: Illegal early access to super
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You may be one of many super fund members who is focusing their
attention on their super because of the turbulent times Australian
markets are facing. Paying attention to your super is a good thing
because it's your money for your retirement.
However, ASIC is concerned that some members may make ill
informed decisions about their super. Faced with tough times, such
as bank foreclosures and retrenchments, some people might get
caught up in illegal schemes to take their money out of super.
The truth about illegal schemes to take your money out of
Promoters of illegal schemes single out people in financial
strife, retrenched workers and some ethnic communities.
Promoters may claim you can withdraw your super, or use a 'self
managed fund', to pay off debts, make a deposit on a home, or buy a
car or holiday. They're lying.
In the worst cases, the promoters steal all your money. ASIC has
successfully obtained jail terms for the most serious offenders. In
other cases, promoters demand a commission, usually taking a fifth
or more of your super. They may get you to sign false statements,
exposing you to fines or possibly jail.
If you finally do get what's left of your money, you could end
up having to pay the whole lot to the Tax Office in back taxes and
penalties, because you did not keep it until you retired.
Legal ways to withdraw your super
Generally you can't touch your super till you retire. If you
meet strict conditions, you may be allowed to access your super
legally, in cases of financial hardship or on 'compassionate
grounds'. The fund may not charge you for assisting you to legally
withdraw your money but you may be required to pay tax on any money
you do withdraw.
Apply to the trustee of your fund.
Generally you must prove that you have been receiving welfare
benefits continuously for a period of at least 26 weeks and that
you are unable to meet your day-to-day living expenses.
Superannuation money will be released only to cover your everyday
living expenses and is limited to no more than $10,000 in any 12
Apply to the Centerlink.
Superannuation money can be released to pay for medical
treatment for a life-threatening illness or for acute and chronic
pain and associated transport requirements, home or motor vehicle
modifications to cater for those with severe disabilities,
palliative care or associated expenses. Money can be released to
make mortgage repayments, but only if your lender is threatening to
sell your home because you have failed to meet the terms of your
If you are in financial difficulty you may also want to consider
seeing a financial counselling service. These services can help you
manage a short-term crisis and plan to prevent a future one. They
are available in every state and territory and provide a free,
independent and confidential service. The details of financial
counselling organisations around Australia are available at www.financialcounsellingaustralia.org.au.
A financial planner may also be able to assist you to make
decisions about your money. You will generally need to pay for
Protect your super and your i.d.
Fraudulent access to super is also rising. Some super fund
member statements are being stolen from private mailboxes and the
information in them is then used to create false identities. Self
managed funds, linked to bank accounts, are then set up. Assuming a
fund member's identity, thieves contact the member's super fund
requesting that their super money be rolled into the fraudulent
account. If you are concerned that this may have happened to you
contact your super fund. You may also report your concerns to APRA
on telephone number 1300 131 060 or your local police.
Find out more about accessing your super
To find out more about these grounds for release, and others
that may apply to you, visit the Department of Human
Find out more about
- Visit our consumer and retail investors' website MoneySmart at
- Phone us on 1300 300 630 for a free copy of our booklet Super
- The Australian Tax Office (ATO) is primarily responsible for
regulating self managed funds. Visit their website for more
information at www.ato.gov.au/superfunds
Find out more about protecting your identity
Last updated: 08 Sep 2015