The Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer announced that the Coalition  Government that Treasury will review:

  • the current rules governing early release of superannuation on grounds of severe financial hardship and compassionate grounds.
  • the circumstances in which, superannuation assets should be available to pay compensation or restitution to victims of crime.

The Minister said the rules governing early release of superannuation have not changed substantially since 1997 and the superannuation system has come a long way since then. An issues paper will be released before the end of this year [so soon…] and the review will make recommendations to Government early in 2018.

The Government is also announcing today that it will transfer the regulatory role of administering the early release of superannuation benefits on compassionate grounds from the Department of Human Services to the Australian Taxation Office (ATO) [hmm…]. The transfer is expected to take effect in 2018. The ATO is responsible for most of an individual’s interactions with the superannuation system — in particular, through its ownership of the superannuation portal for individuals. This change will enable the ATO to provide a more streamlined service to members [sounds friendly…]. As part of this change, the Government will allow the ATO to notify a superannuation fund when it has authorised early release of superannuation benefits on compassionate grounds.

Terms of Reference for a review of the provisions governing the early release of superannuation benefits

Treasury will review whether the current rules governing the early release of superannuation benefits on compassionate grounds and in cases of severe financial hardship (regulations 6.19A and 6.01 of the Superannuation Industry (Supervision) Regulations 1994, (SISR) respectively) remain fit for purpose. In making recommendations, it will consider whether these rules appropriately balance the need to:

  • preserve superannuation benefits to meet the objective of providing income in retirement to substitute or supplement the Age Pension [sounds less friendly…];
  • ensure that superannuation is available for current consumption in certain, limited cases of genuine hardship or where warranted for compassionate reasons [guess we can see where this is going: tougher regulator; tougher rules; still allowing some early excess; hopefully most of the time its genuinely needed]; and
  • ensure the rules can be administered fairly and effectively.

The review will also consider and make recommendations on whether a perpetrator’s superannuation should be accessible to pay compensation or restitution to a victim of crime; and, if so, the circumstances in which this may be appropriate. [Interesting, this one – where might they set the trigger…]

The review will not examine other general conditions of release for superannuation.

Treasury will report to the Government in March 2018.

[Minister’s website – media release; FJM; LTN 236, 8/12/17; Tax Month Dec 2017]