Superannuation Alert 18.05.17

Financial Services eBulletin - 18 May 2017

The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.

Type Subject matter Source Description
Legislative update External dispute resolution and complaints framework Consultation paper and exposure draft legislation

On 9 May 2017, the Government released the final report of the Ramsay Review (a review of the financial system external dispute resolution and complaints framework), accepting all 11 recommendations.

These recommendations include the establishment of a one-stop shop for all financial disputes, including superannuation disputes.  The Government is now undertaking four weeks of public consultation on the new dispute resolution framework, comprising a consultation paper and an exposure draft Bill and Regulations.

Submissions are due on 14 June 2017.

Legislative update Legislation to increase Commonwealth penalty unit passed Crimes Amendment (Penalty Unit) Bill 2017

On 11 May 2017, the Senate passed the Crimes Amendment (Penalty Unit) Bill 2017 (Bill) without amendment. The Bill now awaits Royal Assent.

The Bill amends the Crimes Act 1914 (Cth) to:

  • "increase the amount of the Commonwealth penalty unit from $180 to $210 from 1 July 2017; 
  • delay the first automatic Consumer Price Index (CPI) adjustment of the penalty unit until 1 July 2020; and
  • provide for CPI indexation to occur on 1 July every three years thereafter".

The Explanatory Memorandum to the Bill is available by clicking here.

Federal politics Bill Shorten's Budget-in-Reply speech Speech

On 11 May 2017, Federal Opposition Leader Bill Shorten delivered his Budget-in-Reply speech in the House of Representatives.

The key point related to superannuation is that Labor will oppose the Government's proposal to allow first home buyers to save $30,000 in pre-tax income through their superannuation account.

ATO New transfer balance cap - payment splits

From 1 July 2017, a $1.6 million cap applies to the total amount that can be held in the tax-free retirement phase for account-based pensions. According to the ATO, payment splits following a divorce or relationship breakdown are subject to special rules.

The ATO explains the impact on a member spouse's transfer balance account in situations where a payment split involves the member spouse:

  • converting part of their super income stream into a lump sum to pay the non-member spouse; and
  • "retaining complete ownership of their super interest but having a portion of each payment from their super income stream directed to the non-member spouse".

The ATO has provided examples to assist in the application of the transfer balance cap to payment splits.

Productivity Commission Data availability and use 

On 8 May 2017, the Productivity Commission released its inquiry report on data availability and use.

According to the Productivity Commission, the report "offers guidance on where the benefits of greater data use may be most evident, and ways that governments might engage with the public to generate community understanding of the costs, risks, and benefits associated with data sharing and use".

Key recommendations from the report include:  

  • the introduction of a new Data Sharing and Release Act as well as a National Data Custodian "to guide and monitor new access and use arrangements"; and 
  • the introduction of a 'Comprehensive Right' for consumers which would provide individuals and small/medium businesses with powers comparable to those in the Privacy Act, such as the power "to view, request edits or corrections, and be advised of the trade to third parties of consumer information held by them".  This right would also provide individuals and small/medium businesses with the right "to a machine-readable copy of their consumer data provided either to them or directly to a nominated third party, such as a new service provider".

 

Further information

All information on this site is of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific legal professional advice. No responsibility for the loss occasioned to any person acting on or refraining from action as a result of any material published can be accepted.

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