The ATO is considering applying an additional compliance measure in order to prevent SMSF trustees from accessing their superannuation savings illegally, according to an SMSF technical specialist.
“One of the policy responses that’s been considered, and it is just being considered, there’s no draft legislation around this, is that you need to get approval to access your money before you meet a condition of release,” ASF Audits head of education Shelley Banton revealed.
“That will have to be done through the government, but it is just one of the policy response considerations. So [the ATO] are thinking about how they can tighten that noose moving forward.”
Banton revealed the regulator was contemplating implementing the additional requirement after continuing to identify a substantial number of cases of illegal early superannuation access during the last financial year.
“When [the ATO] sees about 17 per cent of new funds in 2022 failing to lodge their [first] annual return, it’s basically a red rag. [The ATO] view that as deliberate entry into the SMSF world to illegally early access the money,” she said.
“When you translate this into member numbers for 2022, there were 32,000 members who failed to lodge their SMSF annual returns in that year.
“And of the trustees that did lodge their returns, 11,500 auditor contravention reports were lodged with the ATO and that represented 20,000 contraventions, most of which were prohibited loans and a breach of the payment standards, which is [presumably] illegal early access.”
Additionally, she pointed out individuals promoting early access schemes will be the focus of ATO enforcement action.
“As we know, the promoters also continue to be a big part of the problem. And those schemes range from being very simple to being very sophisticated, which [are] obviously much harder to detect,” she said.
“I was at a conference last month and I heard ATO SMSF risk and safety assistant commissioner Justin Micale say that they’ve identified a promoter who was literally walking around a casino and promising people that he could help them set up an SMSF and access their money to pay for gambling.
“It’s a sad situation, it’s very prevalent and the ATO is taking it very seriously and getting other agencies involved, including ASIC (Australian Securities and Investments Commission) and the police.”
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