Australians have been warned to stay alert to scammers attempting to take a slice of their superannuation.
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The Australian Institute of Superannuation Trustees (AIST) warned that “unscrupulous operators” have begun targeting super fund members after the government announced on Sunday that eligible Australians will be able to access up to $20,000 of their superannuation early to counteract the financial pain wrought by coronavirus.
Under the scam, the fraudsters offer to assist fund members in accessing their superannuation early, despite there being no need to involve – or pay – a third party.
Technically, Australians can only access their superannuation when they reach the age of 65 or older, unless there are extreme extenuating circumstances like illness. But fraudsters have long targeted vulnerable Australians by offering to help them get around the rules, earning themselves a slice of the victims’ super in exchange.
“Unfortunately, as we’ve seen before with any early release super measure, there are unscrupulous operators who take advantage of people in financial hardship either through outright fraud in an attempt to steal their super or by offering unnecessary services for which a fee is charged,” AIST CEO Eva Scheerlinck said.
“The ATO is managing the new early-release process though its MyGov website. There is no need to involve a third party and there are no fees involved.”
And, she added, there’s no need to panic and rush as the scheme does not even come into effect until mid-April.
Instead, those keen to access their superannuation early should ensure their personal details are up-to-date.
Suspicious activity can be reported to the Australian Securities & Investments Commission.
Warnings against accessing the coronavirus superannuation scheme
While scammers pose a risk, there’s another potentially more expensive risk that comes with taking advantage of the government scheme.
Industry groups this week said Australians should consider all other alternatives before drawing down their super early, as the effects in retirement can be profound.
In fact, if a 20-year-old woman withdrew the $20,000 from her super balance, she would have lost $120,000 by retirement in foregone interest earnings, Industry Super Australia said.
“Members should tread carefully and only think about cracking open their super after they’ve taken up the extra cash support on offer from the government,” Industry Super Australia chief executive Bernie Dean said.
“Super should be the last resort given the impact it can have on your retirement nest egg.
“Members need to know that taking your super now is like selling a house at the bottom of the market- you’ll lose money you would probably claw back overtime.”
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