Superannuation is once again under review, this time to explore the potential of opening up funds before retirement in special situations, including on compassionate grounds.
The government has asked Treasury to review the current rules governing the early release of superannuation benefits, specifically on the grounds of severe financial hardship and as compensation to victims of crime.
Minister for Revenue and Financial Services Kelly O’Dwyer said in a statement that an issues paper will be released before the end of 2017, and the review will make recommendations to government early in 2018.
The government has also announced that it will transfer the regulatory role of administering the early release of superannuation benefits on compassionate grounds from the Department of Human Services to the Australian Taxation Office (ATO), with the transfer expected to take effect in 2018.
“The ATO is responsible for most of an individual’s interactions with the superannuation system — in particular, through its ownership of the superannuation portal for individuals,” Ms O’Dwyer said.
“This change will enable the ATO to provide a more streamlined service to members.”
As part of this change, she explained, the government will allow the ATO to notify a superannuation fund when it has authorised the early release of superannuation benefits on compassionate grounds.
“This change recognises the existing strong relationship between the ATO and the superannuation industry and reduces the need for manual, paper-based processes – expediting the release of funds to successful applicants,” Ms O’Dwyer said.
Treasury, she said, will consider whether the current rules appropriately balance “the need to preserve superannuation benefits to meet the objective of providing income in retirement to substitute or supplement the age pension”, while ensuring that “superannuation is available for current consumption in certain, limited cases of genuine hardship or where warranted for compassionate reasons”.
“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,” she said.
Ms O’Dwyer confirmed that the review will not examine other general conditions of release for superannuation, and noted that the rules governing early release of superannuation have not changed substantially since 1997.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.