Govt opens way for changes to super early release
The Federal Government has opened the way for a review of whether superannuation assets should be made available to pay compensation or restitution to victims of crime.
The Government has announced a Treasury review of the arrangements which, up to now, have protected a person’s superannuation balances from early access and some forms of court action and, crucially, that it would be transferring regulation of the regime from the Department of Human Services to the Australian Taxation Office (ATO).
The move was announced by the Minister for Revenue and Financial Services, Kelly O’Dwyer who said the review would look at both the early release for hardship and compassionate grounds rules and whether, and in what circumstances, superannuation assets should be available to pay compensation or restitution to victims of crime.
O’Dwyer said the superannuation system had come a long way in the past 20 years and it was time to review the current arrangements as they relate to severe financial hardship and compassionate grounds to ensure they remained fit for purpose.
She said an issues paper would be released before the end of this year and the review would then make recommendations to Government early in 2018.
The Terms of Reference for the Treasury review will seek it looking at whether to:
- preserve superannuation benefits to meet the objective of providing income in retirement to substitute or supplement the Age Pension;
- ensure that superannuation is available for current consumption in certain, limited cases of genuine hardship or where warranted for compassionate reasons; and
- ensure the rules can be administered fairly and effectively.
The review will also consider and make recommendations on whether a perpetrator’s superannuation should be accessible to pay compensation or restitution to a victim of crime; and, if so, the circumstances in which this may be appropriate.
However, the Terms of reference made clear the review will not examine other general conditions of release for superannuation.
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
