Engagement with superannuation is low across the board in Australia. This is an issue the government has been tackling through encouraging investors to find their “lost super” and directly contacting taxpayers with dormant super funds.
In the case of self-managed super funds, it’s often the case that one member takes the lead, meaning the remaining members are often disengaged from the investment and compliance strategy.
For the ATO, this can be “deeply” problematic in the event of a marriage breakdown.
“Marriage breakdowns are the worst,” said assistant commissioner at the ATO, Dana Fleming, at the Accounting Business Expo in Sydney.
“We’ve seen cases where the husband takes all the money out, and it’s simply a case of fraud,” she said.
“That’s why having both parties engaged is critically important,” she said.
Identity fraud is also a growing issue for DIY funds.
On average for the 2018 and 2019 financial year, the ATO had about 26,000 new registrants for SMSFs. About 2,600 of those were reviewed, and approximately 1,3000 didn't make it through to registration.
"The registrations were stopped from setting up an SMSF for a variety of factors but mainly illegal early release and identity fraud risk," the ATO said.