Issue 760, 22 June 2020
In this issue:
- COVID-19 Coronavirus: APRA COVID-19 Ongoing Data Collection
- COVID-19 Coronavirus: early release of super – integrity and compliance
- COVID-19 Coronavirus: early release of super – APRA data
- Superannuation bills update
- Product intervention power: ASIC regulatory guidance
- Tax withholding schedules
COVID-19 Coronavirus: APRA COVID-19 Ongoing Data Collection
In ASFA Action issue 759 we advised that APRA had emailed ASFA regarding proposed new COVID-19 Ongoing Data Collection (ODC).
APRA proposed that the ODC would be comprised of two components:
- monthly – member benefit flows, complaints, insurance, advice and operational resilience
- quarterly – liquidity related data, early release demographics and insurance cancellations relating to the Protecting Your Superannuation (PYS) measures.
The initial reports were scheduled as follows:
- monthly – 25 June 2020
- quarterly – 15 July 2020
with ongoing reporting due on the second Wednesday following the end of the month/quarter.
APRA has advised that, as a result of stakeholder feedback, it has made some modifications as follows:
- the initial submissions will now be due on Friday 31 July
- trustees will now have 15 days after month/quarter end to submit data reports
- Sheet 1 – Members’ benefit flows and fees – will no longer be required
- Sheet 2 – Complaints, Insurance and Advice – will be streamlined
- Sheet 3 – Operational resilience
- a number of the qualitative questions have been removed
- most of the remaining questions will be Yes/No or numerical, with a related short qualitative question
- for most of sheet 3 an initial report will be required, but there will be no need to report for subsequent months unless there has been a substantive change.
APRA is expecting to release the data request early this week.
COVID-19 Coronavirus: early release of super — integrity and compliance
The ATO has outlined its approach to ensuring the integrity of the Coronavirus early release of super program.
In particular, the ATO has noted that it has a variety of data sources allowing it to check for claims that were made incorrectly, and its compliance approach is based on ensuring that people have not exploited the measure. Where the ATO has concerns that claims were not genuine, it will review them. Behaviours that will attract the ATO’s attention include where individuals:
- apply when there is no change to their regular salary and wage, or employment information
- artificially arrange their affairs to meet the eligibility criteria
- make false statements or fraudulent attempts to meet the eligibility criteria
- withdraw and recontribute superannuation for a tax advantage.
COVID-19 Coronavirus: early release of super – APRA data
APRA has made its eighth weekly publication of industry-level data from its early release initiative data collection.
The data shows that from inception of the early release initiative (20 April) to 14 June:
- payments totalling $15.9 billion had been made, with an average payment of $7,486
- 2.3 million applications had been received, with 2.1 million applications paid
- 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.
APRA has also published the seventh 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.
Superannuation bills update
Parliament has risen for its Winter break and will not sit again until 4 August. A number of superannuation-related bills progressed, while others—including some that include amendments intended to have effect from 1 July 2020—are yet to be finalised.
A snapshot of the status of key super-related bills is as follows:
Omnibus amending bill
The Treasury Laws Amendment (2019 Measures No.3) Bill 2019 has now completed its passage through Parliament and has received Royal Assent. As reported in ASFA Action issue 759, this was passed by the Senate with amendments that were not accepted by the House of Representatives and is now awaiting reconsideration by the Senate. This omnibus bill contains amendments to several aspects of the superannuation and related tax legislation, including in relation to:
- protecting your superannuation, unclaimed superannuation and lost members
- superannuation pensions and rollover of death benefits
- employer reporting of salary sacrificed contributions
- downsizer contributions
- extending the timeframe within which existing financial advisers must meet certain new educational and training standards.
The Senate made amendments to the Bill—unrelated to the superannuation measures—that were not accepted by the House of Representatives. After initially insisting on its amendments the Senate later agreed to proceed without them, allowing the Bill to pass. See ASFA Action issue 730 for background on this bill.
Following the passage of the Bill, the ATO issued CRT 031/2020, providing some information in relation to its short-term compliance approach toward amendments in the Bill that change the transfer balance cap calculation where an individual commutes a market linked pension which is a capped defined benefit income stream.
Financial institutions supervisory levy
The package of bills to amend the framework for the financial institutions supervisory levy (the APRA levy) has now been passed by both houses of Parliament without amendment and has received Royal Assent. The package includes the Australian Prudential Regulation Authority Amendment (APRA Industry Funding) Bill 2020, the Superannuation Supervisory Levy Imposition Amendment Bill 2020 and the Retirement Savings Account Providers Supervisory Levy Imposition Amendment Bill 2020. See ASFA Action issue 755 for background on this package of bills.
Bring forward arrangements
The Treasury Laws Amendment (More Flexible Superannuation) Bill 2020 remains before the House of Representatives. This Bill contains an amendment extending the bring forward arrangements for non-concessional contributions to individuals under age 67, as announced in the April 2019 Budget (see ASFA Action issue 755).
The amendment is intended to commence on the first 1 January, 1 April, 1 July or 1 October after the amending Act receives Royal Assent and, once law, the amendment will apply to non-concessional contributions made on or after 1 July 2020. Related amendments to increase the age at which the work test starts to apply to voluntary contributions from 65 to 67, and increase the cut-off age for spouse contributions from age 70 to 75, were recently implemented via the Superannuation Legislation Amendment (2020 Measures No. 1) Regulations 2020 (see ASFA Action issue 757).
Extending choice of fund
The Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 remains before the Senate. This Bill reintroduces amendments to the Superannuation Guarantee law that lapsed when Parliament was prorogued for the election last year. In particular, the amendments extend the ‘choice of fund’ rules to new workplace determinations and enterprise agreements made on or after 1 July 2020 (see ASFA Action issue 729 for background on this Bill).
A number of amendments have been proposed to the Bill by the Opposition, the Australian Greens and the Centre Alliance. These include amendments in relation to how the measure would apply to defined benefit funds, as well as an amendment proposing removal of the $450 per month income threshold for Superannuation Guarantee contributions.
Superannuation Consumer Centre
The Treasury Laws Amendment (2020 Measures No.2) Bill 2020 has been passed by the Senate with amendments that were not accepted by the House of Representatives. The Senate has insisted on its amendments and the Bill is now awaiting reconsideration by the House.
Of relevance to superannuation, this omnibus Bill includes a provision making Superannuation Consumers’ Centre Ltd a deductible gift recipient (DGR). (See ASFA Action issue 755 for background on this Bill.)
Closure of ERFs
The Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020 has been passed by the House of Representatives and awaits consideration by the Senate. This Bill will facilitate the exit of eligible rollover funds (ERFs) from the superannuation industry by 30 June 2021. See ASFA Action issue 736 for background on this Bill.
WA de facto super splitting
The Family Law Amendment (Western Australia De Facto Superannuation Splitting and Bankruptcy) Bill 2019 has not progressed since its introduction in November. This Bill allows separating de facto couples in Western Australia to access the Commonwealth family law superannuation splitting regime (see ASFA Action issue 729 for background).
Product intervention power: ASIC regulatory guidance
ASIC has released a new regulatory guide on the administration of its product intervention power.
The product intervention power allows ASIC to intervene and take temporary action where financial and credit products have resulted in or are likely to result in, significant consumer detriment. The power was implemented via the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 (see ASFA Action issues 704 and 686 for background) and commenced on 6 April 2019.
New Regulatory Guide 272 Product intervention power (RG 272) sets out:
- the scope of the power, including products that can be subject to an intervention order and the types of orders ASIC may consider making
- when and how ASIC may exercise the power, including how it may determine when consumer detriment is significant and how it may intervene
- the process for making an intervention order, including how ASIC may consult with affected parties, when an order will commence, the process by which an order can be extended, amended or revoked, and the consequences of breaching an order.
ASIC previously consulted on a draft of the guidance in June 2019 (see ASFA Action issue 714).
Tax withholding schedules
The ATO has published a package of tax withholding schedules, including some that are relevant to the payment of superannuation benefits.
The Taxation Administration Act Withholding Schedules 2020 instrument contains eleven withholding instruments.
According to the explanatory statement, the instrument amends the withholding schedule that applies for withholding from income in relation to study and training support loans — Schedule 8 — due to the indexing of repayment income thresholds. However, there are “no updates to the remaining ten schedules which will continue to apply from 1 July 2020”. This includes:
- Schedule 12 – tax table for superannuation lump sums
- Schedule 13 – tax table for superannuation income streams.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
