Chapters

19. Superannuation Law

 

Proposals and Questions in this Part

19. Superannuation Law

Question 19–1      The ALRC is not proposing that a trustee should have an express obligation to consider whether an application for superannuation splitting is being made as a result of coercion. Are there any other ways a trustee or another body could consider this issue? If so, what if any steps could they take to limit or ameliorate the effect of that on a victim of family violence?

Proposal 19–1        In Family Violence—A National Legal Response (ALRC Report 114) the Australian Law Reform Commission and NSW Law Reform Commission recommended that the Australian Government should initiate an inquiry into how family violence should be dealt with in respect of property proceedings under the Family Law Act 1975 (Cth). Any such inquiry should include consideration of the treatment of superannuation in proceedings involving family violence.

Question 19–2      What changes, if any, are required to ensure that the Australian Tax Office considers family violence in determining appropriate compliance action in relation to trustees of SMSFs who fail to comply with superannuation or taxation law, where that action may affect a trustee who is:

(a)      a victim of family violence; and

(b)     not the subject of compliance action?

Question 19–3      What changes, if any, to guidance material produced by the Australian Tax Office may assist in protecting people experiencing family violence who are members or trustees of a SMSF?

Question 19–4      What approaches or mechanisms should be established to provide protection to people experiencing family violence in the context of SMSFs?

Proposal 19–2        Regulation 6.01(5)(a) of the Superannuation Industry (Supervision) Regulations 1994 (Cth) should be amended to require that an applicant, as part of satisfying the ground of ‘severe financial hardship’, has been receiving a Commonwealth income support payment for 26 out of a possible 40 weeks.

Question 19–5      Are there any difficulties for a person experiencing family violence in meeting the requirements under reg 6.01(5)(b) of the Superannuation Industry (Supervision) Regulations 1994 (Cth) as part of satisfying the ground of ‘severe financial hardship’? If so, what changes are necessary to respond to such difficulties?

Question 19–6      Should the Superannuation Industry (Supervision) Regulations 1994 (Cth) be amended to allow recipients of Austudy, Youth Allowance and CDEP Scheme payments to access early release of superannuation on the basis of ‘severe financial hardship’?

Question 19–7      Should reg 6.01(5)(a) of the Superannuation Industry (Supervision) Regulations 1994 (Cth) be amended to provide that applicants must either be in receipt of Commonwealth income support payments or some other forms of payment—for example, workers’ compensation, transport accident or personal income protection payments because of disabilities?

Question 19–8      Should APRA Superannuation Circular No I.C.2, Payment Standards for Regulated Superannuation, be amended to provide guidance for trustees in relation to:

(a)      what constitutes a ‘reasonable and immediate family living expense’ in circumstances involving family violence; and

(b)     the effect family violence may have on determining whether an applicant is unable to meet reasonable and immediate family living expenses?

Question 19–9      As an alternative to Question 19–8 above, should APRA work with the Australian Institute of Superannuation Trustees, the Association of Superannuation Funds of Australia and other relevant bodies to develop guidance for trustees in relation to early release of superannuation on the basis of ‘severe financial hardship’, including information in relation to:

(a)      what constitutes a ‘reasonable and immediate family living expense’ in circumstances involving family violence; and

(b)     the effect family violence may have on determining whether an applicant is unable to meet reasonable and immediate family living expenses?

Question 19–10     In practice, how long do superannuation funds take to process applications for early release of superannuation on the basis of ‘severe financial hardship’? What procedural steps may be taken to facilitate the prompt processing of applications in circumstances involving family violence?

Question 19–11     In practice, how long does APRA take to process applications for early release of superannuation on compassionate grounds? What procedural steps may be taken to facilitate the prompt processing of applications in circumstances involving family violence?

Proposal 19–3        APRA should amend the Guidelines for Early Release of Superannuation Benefits on Compassionate Grounds to include information about family violence, including that family violence may affect the test of whether an applicant lacks the financial capacity to meet the relevant expenses without a release of benefits.

Question 19–12     Should reg 6.19A of the Superannuation Industry (Supervision) Regulations 1994 (Cth) be amended to provide that a person may apply for early release of superannuation on compassionate grounds where the release is required to pay for expenses associated with the person’s experience of family violence?

Question 19–13     Should the Superannuation Industry (Supervision) Regulations 1994 (Cth) be amended to provide for a new ground for early release of superannuation for victims of family violence? If so, how should it operate? For example:

(a)      which body should be responsible for administering the new ground;

(b)     what criteria should apply;

(c)      what evidence should be required;

(d)     if individual funds administer the new ground, should there be common rules for granting early release on the new ground; and

(e)      what appeal mechanisms should be established?

Question 19–14     What amendments, if any, should be made to application forms for early release of superannuation to provide for disclosure of family violence where it is relevant to the application?

Question 19–15     What training is provided to superannuation fund staff and APRA staff who are assessing applications for early release of superannuation? Should family violence and its impact on the circumstances of an applicant be included as a specific component of any training?

Question 19–16     In practice, how do superannuation funds and APRA contact members or those who have made an application for early release of superannuation? Is there, or should there be, some mechanism or process in place in relation to applications involving family violence to deal with safety concerns associated with:

(a)      contacting the member or applicant; or

(b)     the disclosure of information about the application?

Question 19–17     Should the 90 day period for a superannuation fund to respond to a complaint by a member be reduced to 30 days?

Question 19–18     Should there be central data collection in relation to applications for early release of superannuation in order to identify:

(a)      the extent to which funds are being accessed early on the basis of any new family violence ground, including numbers of applications and success rates; and

(b)     whether there are multiple claims on the same or different funds?

If so, which body should collect that information, and how?

Question 19–19     Are there any other ways in which superannuation law could be improved to protect those experiencing family violence?