The illegal release of superannuation is one of the top risks that the Australian Taxation Office (ATO) is concerned with as it stopped $126 million in retirement savings from being rolled out of Australian Prudential Regulation Authority (APRA) regulated accounts and into self-managed superannuation funds (SMSFs) in 2020.
Speaking at the SMSF Association National Conference, ATO assistant commissioner, Justin Micale, said the issues along with non-lodgement of SMSF annual returns, regulatory contraventions, approved auditor independence and adequacy, and SMSF auditor number (SAN) misuse were ATO’s top concerns.
On the illegal release of super, Micale said the two behaviours constantly monitored by the ATO were:
- Individuals accessing their own super before a condition of release has been; and
- Criminals using stolen identities to illegally access another individual’s super.
“In 2020 new [SMSF] registrations jumped by 7% to 22,000 compared to 20,400 in 2019. Of these 22,000 newly registered SMSFs, 20% were picked up by our risk models and reviewed by our teams. Of those, a number were deemed to be too high risk and stopped from registering an SMSF,” he said.
“This resulted in an estimated $126 million in retirement savings being stopped from being rolled out of an APRA regulated account and rolled into an SMSF where potentially it could have been illegally accessed.”
Micale noted that in the first six months of this financial year, the ATO identified 18 stolen identities being used to try and set up 12 SMSFs targeting nearly $2 million dollars of super.
“I ask that you pay particular attention to three key elements of the operating system. Firstly, it is critical that you safeguard your clients’ personal details and let us know immediately if you become aware of a breach,” he said.
“Secondly, it is important that you thoroughly check the identity of any new clients before helping them set up a new SMSF.
“Finally, pay close attention to ATO issued alerts/notifications advising of changes to the SMSF account. If you or your clients are not aware of the reasons for these changes take immediate action and contact us.”