Issue 747, 6 April 2020
In this issue:
- COVID-19 Coronavirus: new compassionate ground for early release of super
- COVID-19 Coronavirus: April unclaimed super deadlines deferred
- COVID-19 Coronavirus: AML/CTF KYC requirements
- COVID-19 Coronavirus: resumption of Parliament for JobKeeper legislation
- COVID-19 Coronavirus: APRA Superannuation Data Transformation Project
- COVID-19 Coronavirus: ASIC concern re financial advice by real estate agents about super
- COVID-19 Coronavirus: ASIC information for financial advisers and advice licensees
- COVID-19 Coronavirus: Victorian online probate system postponed
COVID-19 Coronavirus: new compassionate ground for early release of super
As reported in ASFA Action issues 746, 745, 743 and 742, the Coronavirus Economic Response Package Omnibus Act 2020 provides for a new compassionate ground for the early release of superannuation for those impacted by the pandemic. Individuals seeking release of their superannuation under the new compassionate ground will be required to apply directly to the ATO.
The ATO has issued CRT 007/2020 indicating that it will produce one file per business day, and this will be available for funds to download via the Bulk Data Exchange. The ATO will shortly publish a sample of the data file, along with the specification, to the Software Developers webpage.
In response to a request from some funds, the ATO has facilitated the reporting of updated superannuation account balances. This is intended to ensure fund members have access to a more current balance when accessing their details online as part of their application for early release under the new compassionate ground.
Since 31 March, individuals have been able to login into myGov and register interest in the Coronavirus early release of super measure with the ATO. The ATO has issued CRT 009/2020 indicating that as at the end of 2 April 2020, there had been a total of 361,000 registrations of interest. The ATO has also released CRT 10/2020 to provide answers to some frequently asked questions about the early release measure.
On 4 April, the Acting Immigration Minister, Alan Tudge MP, announced that the Coronavirus compassionate ground early release will be extended to “most temporary visa holders with work rights”.
COVID-19 Coronavirus: April unclaimed super deadlines deferred
The ATO has issued CRT Alert 008/2020 indicating that it will defer the scheduled statement day and payment day for unclaimed superannuation money (USM) as at 31 December 2019. This effectively means the statements and payments to the ATO for this period, which were due by 30 April, will be deferred to 31 October.
This deferral has been provided to allow funds to focus on assisting their members during the COVID-19 pandemic. It will also avoid potential confusion or complexity for individuals who may be looking to release amounts from their super accounts under coronavirus early release of super measure that may have been paid to the ATO.
The ATO notes that any fund that wishes to continue with its USM reporting as planned can do so. Funds may want to consider continuing reporting and paying USM for certain categories (such as where members are 65 years or older) where it would be in the member’s interests.
COVID-19 Coronavirus: AML/CTF KYC requirements
As reported in ASFA Action issue 745, AUSTRAC will introduce a rule under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF) to ensure funds will not have to conduct additional AML/CTF customer verification where they pay benefits under the Coronavirus compassionate ground that have been approved by the ATO and processed through MyGov and ATO online.
AUSTRAC has now updated its website to include some more general information about how its reporting entities—including superannuation funds—can comply with their Know Your Client (KYC) requirements during the pandemic. This includes discussion of alternative processes to verify customer identity and some practical examples.
COVID-19 Coronavirus: resumption of Parliament for JobKeeper legislation
As reported in ASFA Action issue 746, the Government has announced that it will introduce, as part of its COVID-19 economic support package, a wage subsidy for eligible employers and employees. The subsidy will be known as JobKeeper.
Parliament will sit on Wednesday 8 April, with reduced numbers of members and senators, to pass the legislation supporting the JobKeeper initiative. A draft of the legislation has not yet been made available.
Treasury has updated its factsheets on JobKeeper to reflect clarifications to the employers and employees that will be covered by the subsidy.
COVID-19 Coronavirus: APRA Superannuation Data Transformation Project
As reported in ASFA Action issues 744 and 742, APRA has postponed a number of new and planned regulatory initiatives to help trustees focus their resources and attention on the impacts of the COVID-19 pandemic.
In line with this approach, APRA has indicated it will be changing the timeframe of the Superannuation Data Transformation project and deferring the collection of data required in Phase 1 by one year to September 2021. (See ASFA Action issues 738, 736, 732.)
APRA has not yet updated its website to reflect this, however ASFA has been advised that the following will apply:
- the reporting of required data identified through the Superannuation Data Transformation project will now be deferred one year to begin in September 2021
- during this period of deferral, APRA will continue its internal work on the project to assess the pilot data received to date and to continue work on the remaining topic papers for Phase 1. APRA will look for “new and flexible ways to work with funds that are able to provide input and feedback during this period so that once the environment stabilises we are well placed to finalise the consultation”
- APRA recognises that for many funds this may not be possible and seeks RSE engagement on a voluntary basis
- a final package of topic papers for phase 1 of the project will be released mid-2020
- final reporting standards and response papers will be released late 2020
- phase 1 data collection as at 30 June 2021 will be due by September 2021
- phase 1 publication of data will occur in late 2021
- APRA will require trustees to respond to ad hoc data requests which will focus on areas where the impact of COVID-19 is likely to have a significant impact on funds and the broader superannuation system
- the pilot data request for the performance and member accounts reporting was due to be received from RSE licensees on 26 March. Given the impact of COVID-19 activities on capacity and resourcing within funds, APRA has agreed to provide extensions to funds upon request. APRA will also exempt funds from the requirement to submit pilot data on request.
COVID-19 Coronavirus: ASIC concern re financial advice by real estate agents about super
ASIC has written to the Real Estate Institute regarding reports that some real estates have been encouraging tenants to apply for early release of their superannuation if they are unable to pay their rent or anticipate finding themselves in that situation in the future.
ASIC’s letter notes its concern that this conduct may contravene the Corporations Act 2001 as it may constitute unlicensed financial advice and may not be in the best interests of individuals.
ASIC has indicated it will be raising these concerns with the relevant state regulatory bodies and will be writing directly to firms where it is alleged or brought to our attention that they have breached the law.
The letter recommends that if real estate agents consider they need to give guidance to a tenant regarding their financial affairs, they should consider referring tenants to information available on the ASIC MoneySmart website.
ASIC intends to monitor this situation closely, and “if contraventions of the licensing requirements of the Corporations Act are found, ASIC will not hesitate to act swiftly to protect vulnerable consumers”.
COVID-19 Coronavirus: ASIC information for financial advisers and advice licensees
ASIC has published a webpage providing answers to frequently asked questions about issues impacting the financial advice industry as a result of the COVID-19 pandemic.
The questions include:
- What is ASIC doing to help reduce the regulatory burden on financial advisers?
- What is ASIC doing about Consultation Paper 329 Implementing the Royal Commission recommendations: Advice fee consents and independence disclosure?
- How can advisers provide new advice and annual reviews in the current environment?
- What about situations where a client needs urgent advice?
- Are there specific considerations for clients around life insurance advice?
- How can advisers keep up with CPD requirements?
- How can an advice licensee maintain oversight of the advice their representatives are providing?
- Can advisers apply to ASIC for relief?
COVID-19 Coronavirus: Victorian online probate system postponed
As reported in ASFA Action issues 741 and 733, the Supreme Court of Victoria Probate Office will be moving to an online system for the grant of probate.
This change was intended to apply from 15 April, however the Probate Office has advised ASFA that it will be postponed due to the COVID-19 pandemic. The Office will continue to issue hard copy grants until a date to be announced in quarter three.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
