Navigating SMSF Best Practices During COVID-19

C.S. Lewis said that “integrity is doing the right thing even when no one is watching”. When one sees articles instructing SMSF advisers and trustees on how to take advantage of the COVID-19 early super release through re-contribution strategies, there’s no doubt that integrity has flown out of the window.

While such strategies are technically correct and have previously existed during the good ole’ TRIS days, they are not in the spirit of a law designed ‘to assist the person in dealing with the adverse economic effects of the coronavirus’.

The ATO has asked that individuals, tax agents and businesses be mindful that it is not acceptable to apply for relief payments or benefits where eligibility may be questionable.

They have doubled down by further stating that applications by individuals for relief through stimulus measures based on artificial arrangements will result in swift action.

Unfortunately, this won’t be the last scheme we see floated against the spirit of the COVID-19 stimulus measures.

Commentary

At this time, it’s critical that SMSF advisers and trustees adopt best practices that generate trust, honesty and integrity within the superannuation system.

How the Superannuation Industry behaves now will determine whether the ATO considers providing similar financial hardship concessions to future generations.

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