Issue 743, 24 March 2020
In this issue:
- COVID-19: changes to super rules passed by Parliament
- COVID-19: impact on Royal Commission implementation, Bills, consultations
- COVID-19: AFCA approach to dispute resolution
COVID-19: changes to super rules passed by Parliament
As reported in ASFA Action issue 742 yesterday, the Government introduced into Parliament the Coronavirus Economic Response Package Omnibus Bill 2020 to give effect to amendments:
- allowing eligible individuals to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21 tax free, under a new compassionate ground of early release
- reducing the superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for 2019-20 and 2020-21.
The Bill includes the necessary amendments to the Superannuation Industry (Supervision) Regulations 1994 and the Income Tax (Transitional Provisions) Act 1997.
The Bill was passed by both houses of Parliament yesterday, with amendments that did not impact the superannuation-related measures.
The amendments commence the day after the Bill receives Royal Assent. However, for the early release measure, it should be noted that individuals are required to apply online to the ATO using MyGov, and that the processes for the ATO to receive applications and issue the necessary determinations approving the early release are still being developed. The online application for the early release benefit is expected to be available from mid-April.
COVID-19: impact on Royal Commission implementation, Bills, consultations
ASFA has received a number of questions from members regarding the impact that the COVID-19 pandemic will have on the implementation of recommendations from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. There have also been queries about the impact on the superannuation-related bills currently before Parliament (including regarding the closure of eligible rollover funds) and current Government consultations, including for the contributions related measures announced in the April 2019 Budget.
At this time, there has been no official announcement from the Government or Treasury regarding any of these measures. However, all Parliamentary sittings have now been suspended until 11 August, and we note that it is therefore not possible for legislation to be introduced or progressed before that date.
We will continue to update members through ASFA Action as matters develop.
COVID-19: AFCA approach to dispute resolution
The Australian Financial Complaints Authority (AFCA) has advised financial firms it will modify its approach to dispute resolution to take into account all regulatory and legislative changes announced as part of Australia’s COVID-19 response.
AFCA Chief Executive Officer and Chief Ombudsman David Locke said AFCA has activated its significant event response plan, that identifies and fast-tracks COVID-19 related complaints. It has also activated its business continuity plan which ensures that we will be able to continue to operate under changing conditions.
Complaints about COVID-19 will be prioritised and fast-tracked to ensure those impacted have their issues resolved as quickly as possible. AFCA will take into account the circumstances and context in which financial firms are currently operating when considering complaints. AFCA understands that firms may be putting in place alternate staffing arrangements and may not be in a position to quickly act on requests for information.
AFCA is encouraging financial firms to continue to:
- work constructively and reasonably with affected consumers during any period of disruption
- openly and transparently communicate with consumers about any delays they may experience in decision making, claims or complaints handling caused by the impact of COVID-19 on their business.
AFCA has established a support hotline (1800 337 444) to ensure a priority service is provided for those impacted by the COVID-19 pandemic. In addition, AFCA has setup an online COVID-19 information hub that will be regularly updated.
Note to members: ASFA will be participating in a regular phone conference with AFCA regarding issues and concerns relating to COFID-19 and dispute resolution. If you have issues/concerns you would like ASFA to raise with AFCA, please forward them to Julia Stannard as they emerge.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
