Issue 770, 10 August 2020
In this issue:
- COVID-19 Coronavirus: Melbourne lockdown – impact on onsite super operations
- COVID-19 Coronavirus: APRA to recommence prudential policy program, licensing
- COVID-19 Coronavirus: early release of super – APRA data
- COVID-19 Coronavirus: early release initiative referred to Auditor-General
- COVID-19 Coronavirus: extension of JobKeeper wage subsidy
- SMSF rollovers in SuperStream: extension of transition period
COVID-19 Coronavirus: Melbourne lockdown – impact on onsite super operations
In ASFA Action issue 769, we reported about the potential impact of the Victorian Government’s stage 4 business restrictions for onsite superannuation operations.
At that time, superannuation funds (along with insurance) were explicitly listed in a document as one of many financial industry sectors that are ‘closed (for onsite work)’ from 11.59pm Wednesday 5 August. This was subject to an exemption allowing workplaces with a COVID safe plan to be open for onsite work relating to some critical ‘banking services’ to support the provision of “services, credit and payment facilities, including the functioning of all operational, treasury, distribution, reporting, communications, monitoring, maintenance, corporate, support and other functions”. A definition of ‘banking services’ for this purpose was set out in an addendum to the main restrictions document. These ‘banking services’ were broadly drafted and included many functions performed by superannuation funds (and their service providers).
The Victorian Government has, since that time, refined and updated its list of ‘permitted workplaces by industry’. ASFA has been advised that the addendum referred to in ASFA Action issue 769 has now been superseded by the information shown on the Victorian Department of Health and Human Services website. This website now includes detail about ‘financial and insurance services stage 4 restrictions’ which refers to the same concept of critical banking services that was previously contained in the addendum. Importantly, this contains, via another webpage, the same list of specific functions—including those relevant to superannuation—previously set out in the addendum.
The permitted functions remain subject to the caveat that, to “the greatest extent possible, staff providing these functions must be supported to work from home, unless the function cannot be performed without an onsite presence. Any onsite functions must operate under the minimum universal obligations” – including having a COVID Safe Plan in place.
It should be noted that the Victorian Government has also now introduced a requirement that employers issue permits for their employees attending permitted worksites, with significant penalties for non-compliance.
COVID-19 Coronavirus: APRA to recommence prudential policy program, licensing
APRA has announced that it will recommence public consultations on select policy reforms and begin a phased resumption of the issuing of new licenses. This follows a suspension of the majority of APRA’s planned policy and supervision initiatives in March as part of its response to the COVID-19 pandemic (see ASFA Action issue 742).
APRA Chair Wayne Byres said that while APRA has formed the view it can restart both policy consultations and licensing activity, it is “neither possible nor desirable to pursue our full policy agenda for the time being. APRA therefore intends to narrow its policy activities in the remainder of this year to a small number of high-priority prudential policy reforms”.
The policy reforms that will be recommenced through a process of public consultation in 2020, and are of particular relevance to superannuation, are:
- the cross-industry prudential standard for remuneration
- the prudential standard for insurance in superannuation
- updated guidance on the sole purpose test
- data collections, including the recommencement of the Superannuation Data Transformation project.
APRA will review its policy program for 2021 in light of the current environment, and with a view to continuing to support the financial sector as it responds to the impact of COVID-19. In recognition of the high degree of ongoing uncertainty, policy initiatives will be responsive to industry capacity and Government priorities.
APRA’s recommencement of assessing and issuing new banking, insurance and superannuation licences will occur in a phased manner commencing in September.
COVID-19 Coronavirus: early release of super – APRA data
APRA has made its fifteenth weekly publication of industry-level data from its early release initiative data collection.
The data covers applications made from inception of the early release initiative on 20 April through to 2 August.
The data shows that from 20 April to 2 August:
- payments totalling $30.3 billion had been made, with an average payment of $7,695
- 3.0 million ‘initial’ applications had been received, with an average application amount of $7,403
- 1.1 million ‘repeat’ applications had been received, with an average application amount of $8,511
- funds were taking an average of 3.3 business days to pay an application, with 95 per cent of applications paid within five business days.
An ‘initial’ application is the first application made in respect of a member account whether this occurred in the 2019-20 financial year application period or the 2020-21 financial year application period. A ‘repeat application’ is an application for a member account that previously submitted an initial application – all ‘repeat’ applications therefore relate to the 2020-21 financial year application period.
APRA has also published the fourteenth tranche of fund-level statistics from its early release data collection, revealing the number and value of the payments processed by each fund, as well as the time taken to make payments.
COVID-19 Coronavirus: early release initiative referred to Auditor-General
The Opposition has requested that the Auditor-General review the integrity and performance of the Coronavirus early release initiative.
The request, from the Shadow Assistant Treasurer and Shadow Minister for Financial Services, Stephen Jones MP, cites concerns about the initiative including:
- theft and fraud issues
- the lack of a verification mechanism for access to the initiative
- (allegedly) inaccurate and misleading promotion of the scheme
- a ‘blowout’ in estimates of how much superannuation would be withdrawn.
The request is currently under consideration by the Auditor-General’s office.
COVID-19 Coronavirus: extension of JobKeeper wage subsidy
The Government has announced further changes to the JobKeeper wage subsidy, primarily as a result of the impacts of the stage 4 restrictions imposed in metropolitan Melbourne.
In late July, the Government extended the availability of the JobKeeper scheme through to 28 March 2021, with some changes to payment rates and eligibility criteria (see ASFA Action issue 766).
Changes announced by the Government on 7 August include:
- further changes to eligibility criteria in relation to the reduction in an employer’s turnover
- extending eligibility to eligible workers employed on 1 July (rather than 1 March) 2020
The Government is still intending to reduce the rate of payments from October, as announced in late July.
As reported in ASFA Action issue 758, the Superannuation Guarantee (SG) laws have been amended to ensure that employers are not subject to additional SG obligations as a result of their participation or anticipated participation in the JobKeeper scheme. These amendments—made by the Superannuation Guarantee (Administration) Amendment (Jobkeeper Payment) Regulations 2020—do not have a specific end-date, but are tied to the operation of the underlying JobKeeper scheme. As a result, the announced changes to the JobKeeper scheme will not require specific changes to the SG laws.
SMSF rollovers in SuperStream: extension of transition period
The ATO has indicated that the deadline for including SMSF rollovers in SuperStream will move from 31 March 2021 to 30 September 2021, as part of the industry’s implementation of version 3 of the SuperStream rollover message.
The extension of SuperStream to SMSF rollovers was initially announced in early 2018, to apply from 30 November 2019. The Government announced in its May 2019 Budget that it would defer the extension to 31 March 2021 as part of a measure to amend SuperStream to incorporate electronic release authorities, and amending regulations were made to reflect this (see ASFA Action issues 718, 703, 688, 680 and 668 for background).
The ATO has now issued CRT Alert 041/2020 regarding implementation of the reforms. This indicates that the ATO has written to large superannuation fund trustees to advise of ATO and APRA support for an extension to the transition period that funds have to move to version 3 of the SuperStream rollover message from 31 March 2021 to 30 September 2021.
According to CRT Alert 041/2020, APRA encourages trustees to comply with the version 3 requirements as soon as possible, but “does not expect failure to comply with these requirements to be reported as a breach prior to 30 September 2021”.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
