Government expands super fraud safety net

The Federal Government will extend its provision of financial assistance to victims of superannuation fraud or theft in light of a recent review of part of the Superannuation Industry (Supervision) Act 1993 (SIS).

Speaking today, the Minister for Revenue and Assistant Treasurer Senator Helen Coonan says the changes follow a review of section 23 of the SIS Act, which highlighted the need to amend the circumstances in which victims of fraud and theft can be reimbursed.

“It was clear from the work of the review and the stakeholder consultations that eligibility for financial assistance under Part 23 [of SIS] needed to be expanded to ensure equitable treatment for those whose superannuation is stolen or defrauded,” Senator Coonan says.

The changes include defined benefit fund members being granted the same protection under SIS as members of accumulation funds, along with financial assistance being granted to individual members of an eligible fund who transfer to another fund or self-managed super fund after a loss is suffered.

At present Senator Coonan has broad powers to provide grants of financial assistance to members of accumulation funds who fall prey to thieves and fraudsters.

Since the SIS Act was established, Senator Coonan has made 802 determinations, granting approximately $44 million in financial assistance.

“The $44 million in compensation paid so far is just a small proportion of the $565.9 billion invested in superannuation and evidence that loss of super through theft or fraud is not a regular occurrence,” she says.

“[However] it is important for the whole community that appropriate safeguards are in place for people who lose their superannuation savings through fraudulent conduct or theft,” she adds.

The Government intends to introduce legislation later this year to implement the recommendations of the review.