ASFA, the voice of super, welcomes the release of the Parliamentary Joint Committee on Corporations and Financial Services’ report into the financial services regulatory framework in relation to financial abuse.
“Superannuation should be a shield, not a weapon in the hands of abusers. We must act to ensure it protects, not harms, Australia’s most vulnerable, and we are ready and willing to work with government and other stakeholders to make this happen,” said ASFA CEO Mary Delahunty.
The report comes after ASFA, Women in Super and the Superannuation Members Council came together in August to write to Assistant Treasurer Stephen Jones and other key Ministers calling for legal reform to stop perpetrators of family violence being able to claim their victim’s super. Potential areas of reform set out in the letter included:
- expanding the forfeiture rule to include family violence-related crimes. This law prevents murderers from inheriting their victim’s super, and
- investigate legislative reforms that would allow super funds to not pay death benefits to perpetrators in substantiated cases of family violence.
ASFA also made a submission to the parliamentary inquiry in September, aimed at developing and implementing strategies to address financial abuse relating to superannuation.
“A perpetrator getting their victim’s super death benefit is an extension of the abuse. The reforms we are calling for will be a critical step towards ensuring that people’s superannuation is protected and not used as a financial reward for perpetrators,” Ms Delahunty said.
Key superannuation-related recommendations from the Committee’s report include:
- amending the Superannuation Industry (Supervision) Act 1993 to disqualify perpetrators of domestic or family abuse from receiving superannuation death benefits
- that the Australian Government undertake a review of the intersection between financial abuse and the superannuation system, particularly in relation to self-managed superannuation funds
- that the Australian Government undertake a review of the COVID-19 early release scheme, focusing on members who may have been coerced to withdraw their superannuation savings, and consider a scheme to repay those whose withdrawals were the direct result of financial abuse, and
- that the government consider the implementation of minimal operating standards, as a first step to best practice standards aimed at mitigating the risk of elder abuse in relation to superannuation.
The report also emphasises the importance of industry-wide education, employee training and developing safety-by-design principles to better support vulnerable members.
ASFA believes financial abuse is a systemic issue requiring coordinated action from government and financial institutions, including the superannuation sector.
“ASFA is committed to working with policymakers and industry stakeholders to implement these reforms and build a superannuation system that protects all Australians,” Ms Delahunty said.
ASFA thanks the Committee and the victim-survivors whose courageous contributions have informed this landmark report.
With the government also undertaking a review of financial abuse in the tax system, ASFA believes now is the time to close many of the loopholes that exist relating to the early release of superannuation, or the rollover of super into a SMSF which can sometimes be misused in ways that facilitate or conceal financial abuse in family or relationship contexts.
“Family violence leaves scars that are invisible but devastating. Together, we must ensure that superannuation fulfills its purpose of providing dignity and financial independence in retirement for all,” Ms Delahunty concluded.
For further information, please contact:
ASFA Media team, 0451 949 300.
About the Association of Superannuation Funds of Australia (ASFA)
ASFA, the voice of super, has been operating since 1962 and is the peak policy, research and advocacy body for Australia’s superannuation industry. ASFA represents the APRA regulated superannuation industry with over 100 organisations as members from corporate, industry, retail and public sector funds, and service providers. We develop policy positions through collaboration with our diverse membership base and use our deep technical expertise and research capabilities to assist in advancing outcomes for Australians.
We unite the superannuation community, supporting our members with research, advocacy, education and collaboration to help Australians enjoy a dignified retirement. We promote effective practice and advocate for efficiency, sustainability and trust in our world-class retirement income system.
