Handing tax office power to rule on early access to super ‘will cut red tape’.
Draft regulations designed to cut through red tape around accessing superannuation on compassionate grounds were this week released for consultation by the Minister for Revenue and Financial Services, Kelly O’Dwyer.
In early February, legislation was introduced to transfer responsibility for approving early access to the Australian Taxation Office (ATO), away from the Department of Human Services.
“The regulations require the ATO to directly notify a member’s superannuation trustee when it has authorised the early release of funds, removing the need for that trustee to independently confirm the amount authorised for release,” Ms O’Dwyer said.
“At what are often times of great stress and concern for the individuals involved, these changes will cut the administrative burden for superannuation trustees and will help successful applicants receive their authorised funds sooner.”
Yesterday, Ms O’Dwyer said on Adelaide radio station FiveAA that she also wanted to look at whether people with disabilities who rented should be eligible to access super in order to modify their homes. Currently, only home owners have early access for this purpose.
While a review of the rules for early release has been welcomed by the sector, the move also comes at a time when medical professionals are criticising the increased use of super for non-urgent surgeries, such as weight-loss procedures.
Other groups are calling for eligibility to access super to be widened to include spouses who are victims of domestic abuse.
Australian Superannuation Funds Association (ASFA) policy director Fiona Galbraith recently said that the ability to leave a situation of domestic violence “can be literally a matter of life or death”.
“Often physical violence is accompanied by financial abuse, ranging from the abusive partner gradually acquiring access to and assuming control over bank accounts and other financial transactions, through to threatening behaviour such as forbidding the partner from working or monitoring and controlling their spending,” Ms Galbraith said.
“Access to financial resources is critically important to enable people experiencing family violence to remove themselves from harmful situations.”
ASFA said that because of problematic issues with the social security system, rising rents and bonds, “it may be appropriate that members experiencing domestic violence should be able to gain early access to some of their superannuation”.
The Australian Institute of Superannuation Trustees also told YourLifeChoices it supported the review of early access rules in part because it would cut the administration burden for funds.
Submissions must be made by 23 March to the latest draft regulations, which are available on the Treasury website.
Treasury said the regulations are unrelated to the ongoing review of the early release of superannuation benefits, which is also considering whether funds from perpetrators of crimes should be tapped to compensate their victims.
“The superannuation system has come a long way since then. It is time to review the current arrangements as they relate to severe financial hardship and compassionate grounds to ensure they remain fit for purpose,” Ms O’Dwyer said.