Agents in strife for advising tenants to access superannuation early
Thursday, April 09, 2020
One of the many recent government announcements in light of COVID-19 has been that some individuals can access their superannuation early, meaning that struggling tenants can withdrawal super to pay their rent.
According to the Australian Taxation Office, eligible individuals will be able to access from mid-April, $10,000.00 of their superannuation before 1 July 2020 and $10,000.00 of their superannuation from 1 July 2020 until 24 September 2020. Eligibility is dependent upon whether individuals satisfy the specific criteria provided by the ATO.
This news was welcomed by tenants facing increasing financial pressure.
However, the Australian Securities & Investments Commission warned in a recent letter to real estate institutes across Australia that agents advising tenants to access superannuation early, would likely contravene the Corporations Act and those agents could face severe penalties.
Tim Mullay, Executive Director of ASIC, stated that an agent’s advice may “constitute unlicensed financial advice in contravention of section 911A of the Corporations Act; or not be in the best interests of individuals in contravention of section 961B of the Corporations Act.”
The letter stated that individuals liable for contravening section 911A, could face a maximum of 5 years imprisonment and/or a fine of up to $126,000. Alternatively, corporations face a fine of up to $1,260,000.
Mr Mullaly stated, “specifically pointing [tenants] to and recommending them to consider the specific possibility of accessing superannuation is, again, likely to amount to a breach of the Act.”
The Executive Director further requested that Australian real estate institutes circulate the letter amongst members. He also provided that,
“If real estate agents are of the view that they need to give guidance to a tenant regarding their financial affairs, they should consider referring tenants to information available on the ASIC Moneysmart website (www.moneysmart.gov.au).”
To discuss a matter feel free to contact us today. Bennett Carroll Solicitors have offices located in Brisbane, Gold Coast and the Sunshine Coast
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