Superannuation Alert 01.06.18
Financial Services - 1 June 2018
Federal Parliament - Bill introduced
On Thursday 24 May 2018, the Treasury Laws Amendment (2018 Superannuation Measures No 1) Bill 2018 (the Bill) was introduced in the House of Representatives and includes, but is not limited to, the following measures:
Super Guarantee (SG) Amnesty
The Explanatory Memorandum states that the SG Amnesty measure provides for a "one-off 12-month amnesty to encourage employers to self-correct historical SG non-compliance".
The Minister for Revenue and Financial Services, the Hon Kelly O'Dwyer MP, said that "employers will not be off the hook – to use the amnesty they must pay all that is owing to their employees, including the high rate of nominal interest. However, the amnesty will make it easier to secure outstanding employee entitlements by setting aside the penalties for late payment that are normally paid to the Government by employers".
Additionally, "employers that do not take advantage of this amnesty will face higher penalties when they are subsequently caught".
The amnesty will run for 12 months from 24 May 2018.
Super Guarantee Opt Out
The Super Guarantee Opt-Out has been introduced to "allow individuals to avoid unintentionally breaching their concessional contributions cap when they receive superannuation contributions from multiple employers. Instead of receiving contributions into superannuation, an employee may apply to the Commissioner to opt out of the superannuation guarantee regime in respect of an employer and negotiate with the employer to receive additional cash or non-cash remuneration".
The date of effect is 1 July 2018.
Federal Parliament - ASIC cost recovery of fees - Bills introduced
- Corporations (Fees) Amendment (ASIC Fees) Bill 2018
- Superannuation Industry (Supervision) Amendment (ASIC Fees) Bill 2018
On Thursday 24 May 2018, a number of bills were introduced in the House of Representatives as part of the second phase of the ASIC industry funding model, fees-for-service, including:
- Corporations (Fees) Amendment (ASIC Fees) Bill 2018; and
- Superannuation Industry (Supervision) Amendment (ASIC Fees) Bill 2018.
Fees-for-services relate to "fees ASIC charges for specific activities, including licence applications or variations and applications for registration. Historically, these services and activities only attracted a nominal fee, however under the new regime, the fees will reflect ASIC's actual costs".
The Minister for Revenue and Financial Services, the Hon Kelly O'Dwyer MP, said "no longer will Australian taxpayers have to subsidise any difference between the fee an entity pays and the actual costs incurred by ASIC, ensuring ASIC's costs are borne by those that have created the need for it".
It will commence from 1 July 2018.
Federal Parliament - Superannuation access for victims of crime - Government released Consultation Papers
On 28 May 2018, the Government released two draft proposals for public consultation that would "provide victims of crime with access to a perpetrator’s superannuation in certain circumstances".
The first proposal is for "a new claw-back mechanism for ‘out of character’ superannuation contributions made by criminals to shield their assets from use in compensating victims of their crimes".
The second proposal is "to allow victims of serious, violent crimes to be able to access a perpetrator’s superannuation as compensation, where other assets have been exhausted, subject to appropriate limits and thresholds".
Submissions will be accepted up until 15 June 2018.
Federal Parliament - Consultation - Retirement Income Covenant Position Paper: Stage one of the Retirement Income Framework
The Treasury has released 'Retirement Income Covenant Position Paper - Stage one of the Retirement Income Framework (May 2018)' for public comment.
According to the Treasury, "the retirement phase of the superannuation system is currently under-developed and needs to be better aligned with the overall objective of the superannuation system of providing income in retirement to substitute or supplement the Age Pension. The Government is addressing this through the development of a retirement income framework.
"The first stage in this framework is the introduction of a retirement income covenant in the Superannuation Industry (Supervision) Act 1993, which will require trustees to develop a retirement income strategy for their members. The covenant will codify the requirements and obligations for superannuation trustees to consider the retirement income needs of their members, expanding individuals’ choice of retirement income products and improving standards of living in retirement.
"[The] position paper outlines the principles the Government proposes to implement in the covenant and supporting regulatory structures".
Federal Parliament - Superannuation on Compassionate Grounds - Regulations made
On 30 May 2018, the Treasury Laws Amendment (Release of Superannuation on Compassionate Grounds) Regulations 2018 were registered.
As stated by the Minister for Revenue and Financial Services, the Hon Kelly O'Dwyer MP, in February, the regulations aim "to improve the integrity of current processes and aim to expedite the release of funds" from superannuation funds to members on compassionate grounds.
The amendments implement the changes needed to transfer the responsibility of the early release of benefits on compassionate grounds from the Department of Human Services to the ATO.
Under the new regulations, once the ATO has authorised the early release of benefits, the ATO will be required to notify a super fund directly, streamlining the process.
APRA - APRA review of super prudential framework - discussion paper released
On 23 May 2018, APRA issued a discussion paper, 'Post-implementation review of APRA’s superannuation prudential framework', in addition to two short topic papers which are the first in a series covering the six specific areas of the prudential framework. The papers released are the following:
- Short Topic Paper One - Governance; and
- Short Topic Paper Two - Risk Management.
The post-implementation review "is not seeking detailed feedback on every aspect of, or requirement in, the prudential framework" but is seeking to "elicit stakeholder views on:
- the effectiveness of the current prudential and reporting standards and supporting guidance material;
- the practical impact of the framework for stakeholders;
- areas within the framework that could be reviewed to either enhance outcomes or reduce compliance costs; and
- the merits of potential changes to the framework to achieve this".
APRA has stated that "the consultation material will be released in three tranches with a four week targeted public consultation period for each tranche".
Submissions on all consultation papers are due by 26 September 2018 and a final report on the review is expected in early 2019.
For more information, please visit the APRA website.
ATO - Downsizer super contributions: ATO guidance
The Draft Law Companion Ruling LCR 2018/D4 provides guidance on the ‘downsizer contribution’ measure, as introduced in Schedule 2 to the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No.1) Bill 2017, which allows individuals to contribute the proceeds of the sale of their home into superannuation in certain circumstances.
Draft Law Companion Ruling LCR 2018/D4 states the requirements which need to be satisfied for a contribution to qualify as a downsizer contribution.
Comments on the draft are due by 8 June 2018.
ATO - First Home Super Saver Scheme: ATO guidance
The Draft Law Companion Ruling LCR 2018/D5 provides guidance on the operation of the First Home Super Saver Scheme (FHSS Scheme).
Draft Law Companion Ruling LCR 2018/D5 outlines the contributions that are eligible for release under the FHSS scheme, the contributions that cannot be released, the steps to take to withdraw under the FHSS scheme, and the obligations following the release of an amount.
Comments on the draft are due by 21 June 2018.
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