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Scammers targeting early release of super
More than 880,000 people have registered their interest in the early release of their super, but consumers are warned to be on their guard against scammers already trying to take advantage.
Following the Government’s announcement in March that anyone suffering financial hardship due to Covid-19 can apply for partial access to their superannuation, 87 scams have been reported to the Scamwatch website.
The Australian Competition and Consumer Commission (ACCC) warns unscrupulous operators are cold-calling people claiming to be from organisations that can help you get early access to your funds.
“For most people, outside of their home, superannuation is their greatest asset and you can’t be too careful about protecting it,” says ACCC Deputy Chair Delia Rickard. “The Australian Tax Office is coordinating the early release of super through its MyGov website and there is no need to involve a third party or pay a fee to get access under this scheme.”
In most cases the scammers try to obtain personal information to help them fraudulently access the victim’s superannuation funds.
“While older people are more commonly affected by superannuation scammers, the new early-access scheme means a range of age groups are now experiencing these scams,” says Ms Rickard.
In 2019, Australians lost more than $6 million to super scams with people aged 45-54 losing the most amount of money.
“Be wary of callers who claim to be from a government authority asking about your super. Hang up and call the organisation directly by doing an independent search for their contact details,” Ms Rickard warns.
Any suspicious behaviour relating to superannuation should be reported to ASIC through its online complaint form at asic.gov.au.
ASIC announces advice relief measures
The decision to partially access super early due to the coronavirus – up to $10,000 in 2019-2020 and a further $10,000 in 2020-2021 – is significant and many Australians will seek assistance from superannuation funds, financial advisers and registered tax agents before deciding whether to access the early release scheme or not.
The Australian Prudential Regulation Authority (APRA) expects super funds to make early release payments to members who meet the eligibility criteria as soon as practicable after approval and direction from the ATO. In the vast majority of cases this should be no longer than five business days.
Australian Securities and Investments Commission (ASIC) has announced that, during the pandemic, advisers will not need to provide an SOA when giving financial advice about early access to super. Even tax agents can give advice to existing clients without needing to hold an Australian financial services licence. These measures only apply if fees are capped at $300.
Many super funds are providing free general advice to their members either on their websites or on the phone. Consumers considering early access to super can also find information on ASIC’s Moneysmart website.
If you lose your job due to the coronavirus but find another one, will you be taxed at a higher rate because it’s considered a second job? Or, if you are having to work from home, can you claim a deduction for home office expenses?
These and other questions relating to the coronavirus pandemic are now being answered on the Australian Tax Office website here.
Updated regularly, the COVID-19 FAQs page answers commonly asked questions from individuals and employers covering a range of issues, including changes to payments, pausing or ceasing your business, rental deductions and more.
There is also a special section for SMSFs here, including questions on related party limited recourse borrowing arrangement relief, temporarily reducing superannuation minimum payment amounts, providing rent relief, super balance losses, SMSF residency, in-house asset restrictions and investment strategies.
SMSF annual returns can be deferred
The Government recognises the affect COVID-19 is having on many SMSF trustees and their service providers as they prepare to lodge their SMSF annual returns (SARs).
SMSFs must be audited before lodging returns and superannuation laws require an auditor to be appointed 45 days before lodgement due date.
The next SARs due date in May 15, but if more time is needed to lodge, tax agents and auditors can contact the Australian Tax Office (ATO) before then to request a bulk extension.
For more information, see the ATO’s COVID-19 page here.
Government releases Code of Conduct for commercial tenants and landlords
Commercial tenants experiencing financial distress will receive rent reductions in the form of waivers or deferrals to assist them through the coronavirus pandemic.
The proposals are part of a new mandatory Code of Conduct for commercial tenants and landlords confirmed by Prime Minister Scott Morrison this month as part of the latest measures to allow the economy to bounce back when the crisis has ended.
The Code binds both landlords and tenants – who have a turnover of $50 million or less and are eligible for the $130 billion JobKeeper program – to certain imperatives. These include landlords reducing rent proportionate to the trading reduction of the business and not being able to terminate leases.
Mr Morrison says the arrangements will be overseen by a binding mediation process administered by the states and territories. “It’s part of our hibernation strategy to preserve as much of the foundations and pillars of our economy through this time to enable the economy to rebuild and grow on the other side.”
Keeping jobs, business and tenancies in place as well as keeping credit lines open are designed to protect against insolvencies and bankruptcies, but some critics argue the new Code is ‘seriously deficient’.
Practice Principal and SMSF specialist David Busoli points out that while the question of rental relief needs to be addressed via consultation between tenant, landlord and the landlord’s banker, the Code places the landlord in a difficult position in their bankers do not cooperate.
“Essentially the Code gives a tenant, with a reduction in turnover of at least 30%, a rental accommodation for the COVID period of at least that amount,” Mr Busoli says. “The concession is based on the tenant’s reduction in turnover, not their ability to pay.
“In contrast, the landlord must make the accommodation without reference to their ability to withstand the income deficiency … The Government’s expectation is that the landlord’s bankers will assist – but this is by no means guaranteed – creating a very real possibility that the landlord will be affected far worse than the tenant.”