Early release of superannuation is permitted by law but only in certain circumstances set out in legislation. Early withdrawal does not require the paid services of an advisor, promoter or anyone else. Normally, preserved benefits can only be released once the person reaches the “preservation age” (which can be between 55-60), depending on date of birth and whether the person has retired from work.
The law prescribes a number of circumstances under which an individual may apply for the early release of their superannuation, such as in severe financial hardship or compassionate grounds. Unfortunately it is under these circumstances that a person is most likely to be stung by a superannuation scam.
Superannuation scams will usually involve promoters holding themselves out as “financial advisors” and claim to assist people to access their funds early by recommending a transfer into a fund operated by the promoter. Once the funds have rolled over into the promoter’s account, the benefits are paid out to the target minus a substantial “commission fee for services”. In some cases, the promoter will simply take all or part of the superannuation funds once rolled over and disappear.
Apart from obvious financial losses, victims may be assessed to be liable for: concessional taxes, payment of a general interest charge on debt incurred, and payment of a shortfall tax penalty for failing to disclose the amount in tax returns. In addition, victims will have no tax deduction available on the ‘commission’ paid.
Our Sydney Superannuation Solicitors can advise you on whether you meet the legal requirements for an early withdrawal of super and assist you with any application required. In the worst case, our Sydney Superannuation Lawyers can also assist you in tracking down the promoter, whether an individual, business or company and assist you in the appropriate legal action to recover unlawfully obtained funds.
We have branch offices conveniently positioned across the Sydney metropolitan area including in Gordon, Baulkham Hills and Liverpool. For a full list of our office locations, with complete addresses, click on our Locations tab above or contact our main office line on (02) 9233 4048.
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