Trustees warned on early access

The ATO has warned trustees they will be held accountable for members who access super without meeting a legitimate condition of release.

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The ATO has reminded SMSF trustees that releasing benefits to members who have not met a condition of release may result in them being held liable for those individuals’ actions.

In a post on its website, the regulator stated there were only a few situations where early access to super was permitted and taking money from an SMSF without meeting these conditions could result in serious penalties.

“If you’re a SMSF trustee and you illegally release benefits to a member who hasn’t met a condition of release, you may face administrative penalties and be disqualified as an SMSF trustee,” it said.

“Illegal early access is the most significant regulatory risk impacting the SMSF sector, with an estimated $250.1 million in illegal early access from SMSFs in the 2021/22 period. It can have a significant impact on an individual’s retirement savings, result in additional tax, penalties and interest.

“To reduce illegal early access through SMSFs, we provide support and guidance on obligations as a trustee, review new registrants and remove non-compliant SMSFs from Super Fund Lookup. If an SMSF is removed from Super Fund Lookup, it cannot receive contributions and may face liquidity issues.”

The ATO also called on SMSF trustees or members who have been involved in accessing benefits early to disclose their activity to the regulator, adding it would discover the activity eventually.

“If you have illegally accessed your super or been involved in a scheme promoting illegal early access, contact us immediately using our voluntary disclosure service,” it said.

“We will take your voluntary disclosure and circumstances into account when determining any penalties.

“We also investigate late or non-lodgements of SMSF annual returns as that can be an indicator to us that SMSF members may be illegally accessing their super early and it raises questions about the trustees’ ability to fulfil their obligations and the purpose of having an SMSF.”

In a separate post, the ATO flagged its online content for trustees and auditors will change after conducting a review of the two sections on its website directed at those groups.

“The refreshed SMSF web content will go live in the coming weeks and aims to provide a user-friendly experience, reduce duplication and streamline navigation, making it easier for you to find the information you need,” it said.

“While much of the content has been rewritten and the layout and navigation has changed, our interpretation of the law remains the same.”

Following the change, regular users of the website should check and update any bookmarks they frequently use.

“We understand that many of you rely on bookmarked pages for quick access. While we are committed to maintaining these URLs, there may be occasions when you will need to update your bookmarks. After the new content has been published, we recommend reviewing your bookmarks to verify they are correctly linked,” the ATO said.

March 26, 2025
Jason Spits
smsmagazine.com.au