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Tough penalties aimed at superannuation schemers

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A timely warning from the Financial Services Minister:

People who illegally access their superannuation funds early will get almost half that money taxed under harsh new measures being proposed by the federal government.

Financial Services Minister Bill Shorten said the changes would impose the non-compliance tax rate of 45 per cent on any money released early from a super account by illegal means.

For example, if someone illegally accessed $10,000 of their super savings early they would incur a tax liability of $4,500, plus a 1.5 per cent Medicare levy.

Stronger sanctions were needed to deter those who promoted early-release super schemes as they undermined the government's retirement policy and harm members, Mr Shorten said.

Some of the schemes charged fees of up to 50 per cent on unsuspecting people, and in some cases dodgy operators have stolen the entire balance or used the members' identity for criminal purposes.

There are no specific penalties now for those who promote early-release super schemes.

But under another bill introduced to parliament on Thursday, Mr Shorten said those pushing such schemes could face up to five years in prison and fines of up to $340,000.

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