It's yours, but not yet" says Andrew Frith of The Self-Managed Super Specialists in reminding people that in 2010 two individual trustees received gaol sentences for two years for promoting schemes that encouraged individuals to illegally access their superannuation early. "Severe penalties apply if you illegally access your super early. You will have to pay tax on the money you access early and other penalties may also apply, depending on your involvement in the scheme. Even if you set up a self-managed super fund (SMSF) with the sole intent of accessing your super savings early, you are breaking the law.
You should not be accessing your super early to pay off debts, buy a house or go on a holiday. Your super is intended for your retirement or when you become eligible under the other conditions of release. The SMSF regulator, the ATO, is presently:
- assessing all new trustees of SMSFs and contacting new SMSF trustees who present a risk to ensure that they understand their legal obligations as SMSF trustees; and are
- working to bring criminal charges against any scheme promoters or trustees who illegally access, or assist others to illegally access, their super early.
In a worst case scenario, if you establish a SMSF and knowingly access your super savings illegally, you may also face a fine of up to $220,000 and a gaol term of up to five years.
Andrew Frith is CEO of Leenane Templeton The Self Managed Super Specialists Pty Ltd and a Financial Planner
