14th Jun 2018
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Taxman to have last say on early release superannuation
Author: Olga Galacho
Taxman to have last say on early release superannuation

Oversight of the early release of superannuation on compassionate grounds will be transferred from the Department of Human Services (DHS) to the taxman from 1 July.

The move, first flagged in February, is part of a raft of changes to early release of super currently being considered.

“The Australian Taxation Office (ATO) is responsible for most of an individual's interactions with the superannuation system. This change will enable the ATO to build on these existing relationships and provide a more streamlined service to members,” Revenue Minister Kelly O’Dwyer said in a statement.

She claimed the switch would minimise any fraud risk and “ensure successful applicants received funds sooner in their time of need”.

The DHS has administered early release since 2011 and will accept requests for early release until 30 June, plus process those applications. But from 1 July, the ATO will take over, deciding on requests based on compassionate grounds.

“A key improvement under the new process is the ATO providing electronic copies of approval letters to superannuation funds at the same time as to the applicant,” the statement said.

“This will mitigate fraud risk and negate the need for superannuation funds to independently verify the letter with the regulator.”

The Government said the transfer of powers was one of a number of measures it wanted to introduce to “ensure that the rules governing superannuation serve the interests of members”. “It complements the review under way on the rules governing the early release of superannuation benefits on compassionate grounds and in cases of severe financial hardship.”

Treasury will report to the Government on the review of super rules later this year.

Do you think that oversight of compassionate grounds for early release of super should sit with the ATO?

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    COMMENTS

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    14th Jun 2018
    8:41am
    Good job Kelly
    Knows-a-lot
    14th Jun 2018
    11:53am
    Sarcasm?
    Anonymous
    14th Jun 2018
    1:07pm
    No
    GD
    14th Jun 2018
    10:01am
    No it's just another way the government want's to big brother us. Whom ever thinks the government does anything to help the pensioners is delusional and mistaken.
    KSS
    14th Jun 2018
    1:47pm
    Really? And the Department of Human Services doesn't 'big brother' you now?
    Noodles
    14th Jun 2018
    10:07am
    I think it is a good idea. Super is there to help support you in your later years. I am amazed at the number of people who want to leave this money as an inheritance. It is there to be spent, spend it on yourself...you earned it.
    Cowboy Jim
    14th Jun 2018
    10:21am
    The universal pension schemes overseas work only because you
    cannot take the money out early and only people getting to the pension age can access it. People who die earlier have contributed all their working life will have paid for the pensions for the survivors and not their own heirs like is the case here. Supporters of the universal pensions quite often miss mentioning that fact. Makes contributing to super a bit harder to swallow, does't it?
    marls
    14th Jun 2018
    1:34pm
    Cowboy Jim
    Aust also had a workers compulsory fund 7.5% of our taxes from 1950's and in 1977 Malcolm Fraser transferred 470 million into consolidated revenue that in today's money is billions that 7.5% is still current the compulsory pension fund was set up as non means test plus now Aust workers pay into super
    Google who stole the workers compulsory pension by Australian morning mail
    I have relatives in two European countries there's no means test no means test in New Zealand they get the pension at 65 and they can continue to work full time
    George
    14th Jun 2018
    8:02pm
    CJ, you have mixed up the concepts of Pension and Superannuation.
    As Maris has noted, here in Australia all taxpayers paid (and continue to pay) an additional 7.5% in taxes for funding Pensions (although our disgusting politicians from both sides did not keep it aside and threw these MASSIVE FUNDS into General Revenue, and then try not to pay age pensions by pretending there isn't enough money). Hence, Universal Pension is entirely justified and affordable here on that basis.

    Super on the other hand is additional savings forced on employees, and is meant as a top up of pensions - it is entirely the money of employees to spend as they like on retirement, although prudent people keep it aside to use carefully for sudden expenses or better quality of life. Not the Govt's business to control.
    OnlyGenuineRainey
    14th Jun 2018
    11:00pm
    George, unfortunately super is NOT entirely the money of employees to spend as they like on retirement. If the balance exceeds about $550,000 (or $840,000 combined for a couple) the government claims the right to govern its use - requiring that it be used to compensate for not getting a pension. Prudent folk CAN'T keep it aside to use carefully for sudden expenses or a better quality of life because they are compelled to use it for essential living costs, given that they have no other income. So those with less than the threshold can be as prudent as they please and treat super as their money, but those above the threshold have no such discretion.
    George
    14th Jun 2018
    11:47pm
    OGR, I was merely clarifying basic concepts for CJ. In that context, unfortunately your comments may only confuse the picture for CJ (I understand that is the reality for those in that category, and again, why Universal Pension is necessary for all).
    Cowboy Jim
    15th Jun 2018
    10:15am
    George I understand you clearly, overseas you are forced to pay that 9.5% into the universal pension, employer does likewise. If you want super on top of that it is your own affair and you are not forced to have it. It is your own money after 65 years of age, comes out on top of the pension. The negative is that all income is taxable from the two funds and in most Euro countries the tax free threshold is lower than our generous $18'000 or so.
    George
    15th Jun 2018
    1:44pm
    So, CJ, leaving aside Super here which is compulsory for employees (and it is your money), the key difference is that the Govts here also force all taxpayers to pay 7.5% taxes to the Govt for funding age pension, but when it comes to pension age they want to avoid paying it to as many people as possible. In other words, we have the MEANEST Govt here and they are denying us the Universal Pension.
    Cowboy Jim
    15th Jun 2018
    4:27pm
    Thank you George - you got it in a nutshell!! I still got some money from Europe ($100) a month because I once paid in, C'Link is counting it. When the agreement was signed it was an entitlement to get the OAP and my old country advised me not to pay in any more as the agreement would preclude me getting 2 pensions so I should stop paying in which I did. Later in the 80s my pension was changed to the welfare we have now and instead of having the pension I was promised I am now a welfare recipient. Not good - but cannot be altered. Thanks for your input, there must be lots in my situation!!
    Knows-a-lot
    14th Jun 2018
    11:53am
    If O'Dwyer has anything to do with it, expect a screw-up of the first magnitude.
    Anonymous
    14th Jun 2018
    11:58am
    Well I would certainly prefer her guiding hand than that of a spiteful nasty bigot - just saying!
    ozirules
    14th Jun 2018
    12:01pm
    Ha Ha the tax man to be showing compassion. Would you also believe that I saw Santa Clause screwing the Tooth Fairy on my lawn last night.
    MICK
    14th Jun 2018
    2:09pm
    Well done. The watering down of what superannuation is meant to be has been going on for decades with some in the community, including mentally deficient administrators, doing their best to erode the system down to piggy bank status.
    Anonymous
    14th Jun 2018
    3:55pm
    Talking about industry super funds are we, Mick?? Just asking!
    Old Man
    14th Jun 2018
    4:09pm
    I agree MICK, whilst the super funds belong to the member, there is a tacit agreement that those funds are not a savings bank but more like the old style insurance endowment policies which had a maturity date. As to your offer of enjoying a beer together, I'd love to but no talking about religion or politics.

    Hey Big Al, bit unfair to attack what someone hasn't said don't you think?
    Sundays
    14th Jun 2018
    2:34pm
    If it mitigates fraud it’s a good thing. You’d be surprised at what some people think constitute dire straights. People need to realise that Super is for retirement unless there are extenuating circumstances
    sunnyOz
    14th Jun 2018
    3:14pm
    Sundays - there are some Facebook pages that would leave you totally gobsmacked! Are surreptitiously called 'Centrelink help pages' - but nearly every second person is wanting to know how to get some of their super out. And for reasons that would make your toes crawl. Just unbelievable!
    So many of them see super merely as a bank, claiming the maximum $10,000 each year for the most ludicrous reasons. Posters telling people how to word the paperwork to ensure they get the payment. Is just ridiculous! Something has to be done to tighten up frivolous claims.
    OnlyGenuineRainey
    14th Jun 2018
    11:02pm
    If they look like having more than the asset threshold on retirement, I don't blame them. Financial advisers are telling people they should limit retirement savings to $500,000 for a couple - around $300,000 for a single, because anything more than that only benefits the taxpayer.
    Noodles
    18th Jun 2018
    6:34pm
    A lot of dumb people out there thinking repairs to cars, homes , boob jobs are things for which you can drawn down on your superannuation.
    I too have read the Facebook pages Sundays and it is just unbelieva ble what people write.
    .

    Appears to me that some in society can see this balance lying there and just cannot wait to get their hands on it.

    People need to go and read up on what is allowed and the rules are pretty strict.
    OnlyGenuineRainey
    19th Jun 2018
    9:05am
    Well, the government's attitude is ''use it or lose it''. If you don't take it out and spend it, you'll probably end up far worse off than if you did given the stupid pension rules, so I say ''good for the smart ones. Wish I'd been smarter! If you can get it out, do so!"
    OnlyGenuineRainey
    19th Jun 2018
    9:06am
    If the STUPID government wants people to stop draining their super prematurely, have the intelligence to modify pension rules so that it's not a massive disadvantage having a moderately healthy (but not large) balance.
    vinradio
    14th Jun 2018
    5:52pm
    Well, when APRA was in charge, they denied me early release of a small amount of my super, and I lost my house, with many other serious and long term consequences. So whoever is in charge, I hope they show compassion, and the grounds for release are not narrow and unrealistic!
    sunnyOz
    14th Jun 2018
    10:17pm
    Read the facebook pages - and everyone and sundry is taking out super for every reason. Like - repairs for a car, needed to pay bills, wanting to go overseas for boob job, bond and rent, etc. The only concern they have is they complain that they have to pay tax on it, and there question is - 'can I get the tax back?'
    Noodles
    16th Jun 2018
    7:36am
    If what you say is correct Sunny Oz ..then a crackdown is definitely needed. Superannuation was not set up as a piggy bank for such frivolous reasons. It is there for your later years...that is it.
    Ray
    17th Jun 2018
    1:50pm
    People are entitled to do that sunnyOz. As long as they can provide valid proof why they need that money.

    There is nothing "frivolous" about having to do roof repairs for example, noodles.
    johnp
    17th Jul 2018
    10:16am
    Havent looked thru all the comments but there is one area which is problematic.
    My daughter has moved to UK and married there. Likely will not return to Australia. Her superannuation is locked here until she turns say 67 or whatever by then. My wife and I will be long gone then and her super will likely to have grown to well over a million as it is in growth option. How many are Australians are overseas in this situation ? How many may even be in dire straits or even homeless but are millionaires back here ? Any comments are welcome.


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