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Issue 766, 23 July 2020 
In this issue: 

 

COVID-19 Coronavirus: Economic and Fiscal Update – superannuation announcements 

As part of its Economic and Fiscal Update, the Government today announced a number of measures relevant to superannuation. 

 

1. Coronavirus early release of superannuation: application period extended 

As currently legislated, eligible Australian and New Zealand citizens and permanent residents are able to apply for the tax-free release of up to $10,000 of their superannuation in the period 1 July – 24 September 2020, under a ‘phase 2’ of the Government’s Coronavirus early release initiative. (Eligible Australian and New Zealand citizens and permanent residents, as well as eligible temporary residents, were also able to apply for the release of up to $10,000 before 1 July 2020 under ‘phase 1’ of the initiative.) 

Today, the Government has announced that it will extend the period in which early release applications can be lodged under phase 2, from 24 September to 31 December 2020. The Government has not announced any further amendments to the early release scheme. 

 

2. Facilitating the closure of eligible rollover funds (ERFs): amendments 

The Government will amend the Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020. This Bill, currently before the Senate, contains measures to facilitate the closure of ERFs eligible rollover funds first announced in the 2019-20 Mid-Year Economic and Fiscal Outlook (MYEFO) statement. The amendments will: 

  1. defer by 12 months the start date of the measure that prevents superannuation funds transferring new amounts to ERFs (under the current drafting of the Bill, this measure was to apply from the later of seven days after Royal Assent of the legislation or 1 May 2020) 
  2. defer the date by which ERFs are required to transfer accounts below $6,000 to the ATO from 30 June 2020 to 30 June 2021 
  3. defer the date by which ERFs are required to transfer remaining accounts to the ATO from 30 June 2021 to 31 January 2022 
  4. allow all superannuation funds to voluntarily transfer amounts to the ATO in circumstances where the trustee believes it is in the best interests of that member, such as amounts that would otherwise have been transferred to an ERF. (No specific commencement date has been indicated for this measure. However, under a previously circulated amendment to the Bill that would have implemented this measure, the proposed start date was—as for item (I)—the later of seven days after Royal Assent of the legislation or 1 May 2020. It is possible that commencement of this item will therefore be aligned with the new date for item (I).) 

The Government will also provide additional funding to the ATO to administer amounts transferred voluntarily. (See ASFA Action issues 736 and 731 for background on these measures and the Bill.) 

 

3. Revised Start Dates for Tax and Superannuation Measures  

The Government has announced deferred start dates for some tax and superannuation measures, and confirmed some previously announced deferrals: 

The Economic and Fiscal Update also confirms the Government’s previous halving of the minimum drawdown requirements for account-based superannuation income streams and similar products for 2019-20 and 2020-21, as part of its initial response to the COVID-19 pandemic response (see ASFA Action issues 743 and 742). 

 

 

COVID-19 Coronavirus: APRA COVID-19 pandemic data collection – FAQs 

In recent ASFA Actions we have reported on the new ‘pandemic data collection’ (PDC) launched by APRA, which is designed to: 

The initial monthly and quarterly lodgments under the PDC are due on 31 July. (See ASFA Action issues 761, 760 and 759 for background.) 

APRA has now published a series of frequently asked questions (FAQs) about the PDC. 

 

 

COVID-19 Coronavirus: extension of JobKeeper wage subsidy 

The Government has announced the extension of the JobKeeper wage subsidy, through to 28 March 2021. 

Some changes will apply to payments under the JobKeeper scheme from 29 September, including: 

As reported in ASFA Action issue 758, amendments to the Superannuation Guarantee (SG) laws ensure that employers are not subject to additional SG obligations as a result of their participation or anticipated participation in the JobKeeper scheme. In particular, the amendments—made by the Superannuation Guarantee (Administration) Amendment (Jobkeeper Payment) Regulations 2020—provide that amounts of salary or wages that do not relate to the performance of work, and are only paid to an employee to satisfy the wage condition for receiving JobKeeper payment, are excluded salary or wages for SG purposes. The effect is that these amounts are excluded from the calculations of an employer’s SG shortfall and the minimum superannuation contribution an employer is required to make in respect of an employee to avoid a SG charge liability. 

 

 

APRA reminder on upcoming legislative obligations 

APRA has today written to registrable superannuation entity (RSE) licensees to remind them of two new key obligations that are designed to prompt robust and in-depth consideration of the outcomes being delivered to members – the Business Performance Review (BPR) and the outcomes assessment. 

The letter notes that: 

 

 

Fee and cost disclosure: ASIC amending instrument 

ASIC has registered a legislative instrument clarifying the date from which its revised fee and cost disclosure requirements for superannuation funds and managed investment products apply to Product Disclosure Statements (PDSs). The instrument also makes a number of technical amendments to the disclosure requirements. 

In ASFA Action issue 733, we reported that ASIC had advised it intended to amend the legislative instrument setting out its revised fee and cost disclosure requirements for superannuation funds and managed investment schemes – ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070. In particular, ASIC had indicated it would rectify an inconsistency between Instrument 2019/1070 and its policy intent, as set out in Regulatory Guide RG 97, regarding the application of the revised disclosure arrangements to PDSs. 

ASIC has now registered ASIC Corporations (Amendment and Repeal) Instrument 2020/579. 

Instrument 2020/579 makes minor amendments to Instrument 2019/1070 and some related instruments to clarify and confirm the intended operation of aspects of the fee and cost disclosure regime and give effect to ASIC’s intended policy positions. 

In particular, Instrument 2020/579: 

Instrument 2020/579 commenced on 23 July. 

 

 

ASIC technical amendments: PDS in use notices, repeal of spent instruments, IDPS 

ASIC has registered a legislative instrument making a number of technical amendments relevant to superannuation. 

As noted above, ASIC Corporations (Amendment and Repeal) Instrument 2020/579 makes amendments to the fee and cost disclosure regime for superannuation funds and managed investment products. 

In addition, Instrument 2020/579: 

Instrument 2020/579 also makes some amendments in relation to investor-directed portfolio services (IDPS). Under ASIC Class Order [CO 13/763], an IDPS operator is required to give an IDPS Guide to a client. The disclosure of fees and costs in an IDPS Guide is modelled on the fees and costs disclosure required in a PDS for a managed investment product. Instrument 2020/579 makes some amendment to the IDPS disclosure requirements to align them with the updated disclosure requirements for managed investment products. 

 

 

ASFA REGULATORY WATCHLIST

ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations

and other regulatory announcements relevant to superannuation.

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