Issue 776, 23 September 2020
In this issue:
- Transfer of remaining SCT complaints to AFCA: consultation
- Remaking of income tax regulations: consultation
- Delayed insurance claims in super: new AFCA approach document
- New complaint statistics: AFCA Datacube updated
- COVID-19 Coronavirus: validity of electronic signatures and meetings
- COVID-19 Coronavirus: early release of super – APRA data
Transfer of remaining SCT complaints to AFCA: consultation
The Australian Financial Complaints Authority (AFCA) is seeking feedback on proposed amendments to its Rules to allow it to deal with superannuation complaints impacted by the upcoming windup of the Superannuation Complaints Tribunal (SCT).
In the April 2019 Budget, the Government announced funding arrangements to allow the SCT to finalise its remaining caseload and conduct closedown activities, then cease operations after 31 December 2020 (see ASFA Action issue 703).
Transition arrangements have been developed to ensure that AFCA is able to address:
- any remaining complaints currently with the SCT not finalised prior to the SCT ceasing operations
- any matters that are before the Federal Court on appeal from the SCT that may need to be determined again, or finalised in accordance with the Court’s directions.
AFCA’s Rules will need to be amended to allow for these arrangements.
AFCA has released a consultation package that includes the proposed amendments to its Rules and also to its Operational Guidelines.
In addition to addressing the SCT transitional arrangements, the proposed amendments also clarify which Australian Bureau of Statistics reports are used to index AFCA’s monetary limits (for non-superannuation complaints) and correct a reference to legislation.
Following the consultation, the proposed amendments to the Rules will need to be reviewed and approved by ASIC. AFCA anticipates that the amended Rules will be released by January 2021.
If you have any feedback that you would like ASFA to consider in relation to the consultation package, please forward it to Julia Stannard by close of business Friday 9 October.
Remaking of income tax regulations: consultation
Treasury has released a draft of regulations to remake tax regulations which are due to sunset (expire) early next year.
The Income Tax Assessment Regulations 1997 (ITAR 1997), which will sunset in April, include a number of operational rules for income tax calculations and liabilities for individuals and superannuation funds. These include, for example, rules about:
- deduction of personal contributions and the calculation of excess concessional or non-concessional contributions
- the transfer balance cap and the tax treatment of various superannuation benefits
- taxation of superannuation entities.
The proposed Income Tax Assessment Regulations 2020 will remake and improve the operation of the ITAR 1997 by omitting redundant provisions, simplifying language, and restructuring provisions for ease of navigation. According to the explanatory material, these changes do not affect the substantive meaning or operation of the provisions except in limited—and clearly identified—cases.
If you have any feedback that you would like ASFA to consider in relation to the draft regulations, please forward it to Julia Stannard by close of business Friday 9 October.
Delayed insurance claims in super: new AFCA approach document
AFCA has published a new document setting out how it approaches complaints about delays in handling claims involving insurance held through superannuation.
The AFCA approach to delayed insurance claims in superannuation covers:
- AFCA’s jurisdiction in relation to these complaints and its review of the decisions and conduct of the trustee and insurer
- AFCA’s approach to assessing complaints about delay, including delays caused by the insurer, the trustee, or their agents, as well as delays caused by the complainant or by a third party such as a medical practitioner or the complainant’s former employer
- the information AFCA expects an insurer and trustee to provide
- the consequences of unreasonable delay.
The approach document includes a number of case studies indicating how AFCA will approach common scenarios.
New complaint statistics: AFCA Datacube updated
AFCA has updated its online comparative reporting tool, the AFCA Datacube, to include information about all financial complaints lodged with it from 1 July 2019 to 30 June 2020.
The AFCA Datacube includes information about the number of complaints lodged about financial firms – including superannuation funds. It includes details of how long it takes a firm to resolve a complaint and whether a financial firm responds to complaints in a timely manner. It also allows users to compare financial firms side-by-side.
AFCA’s CEO and Chief Ombudsman David Locke said:
“The data released today covers complaints lodged up to 30 June 2020. The early impact of COVID-19 can be seen in the spikes in complaints relating to travel insurance and early access to superannuation in particular.
With the early access to superannuation, complaints initially related to delays in payments. It was challenging for many superannuation funds to process such a high number of requests in a short period of time. AFCA worked proactively with the funds to resolve consumer concerns as they arose and to learn any lessons before the second phase of withdrawal requests commenced in early July 2020.
This resulted in far fewer complaints during the second early release application period and it meant consumers were able to get their money sooner.”
COVID-19 Coronavirus: validity of electronic signatures and meetings
In ASFA Action issue 769 we reported that the Government had announced an extension of temporary relief measures designed to provide certainty to businesses about how they can meet certain obligations under the Corporations Act 2001 during the pandemic.
That temporary relief, which was due to expire on 6 November, included measures designed to:
- give certainty that when company officers sign a document electronically, the document has been validly executed
- ensure that companies and other entities that are required to or wish to hold a meeting, such as an Annual General Meeting, may do so using technology rather than face-to-face meetings
- enable a quorum, votes, notices and the asking of questions at the meeting to be facilitated electronically and allow for information required for the meeting to be circulated and accessed electronically.
The Government has now made the Corporations (Coronavirus Economic Response) Determination (No. 3) 2020 to give effect to the announced extension. As a result, the relief measures will now expire on 23 March 2021.
While these relief measures are not specific to superannuation, they are relevant to the way in which superannuation trustee companies manage their general obligations under the Corporations Act 2001. (See ASFA Action issue 754 for background in relation to the relief.)
COVID-19 Coronavirus: early release of super – APRA data
APRA has made its twenty-first 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. The data shows that from 20 April to 13 September:
- payments totalling $33 billion had been made, with an average payment of $7,672
- 3.2 million ‘initial’ applications had been received, with an average application amount of $7,403
- 1.3 million ‘repeat’ applications had been received, with an average application amount of $8,413
- 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 twentieth 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.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
