This week’s Super Alert includes a Senate Committee report into the new SG Bill and two Treasury consultations in relation to ASIC’s increased enforcement powers and the PYS Act.
Senate Committee recommends new salary sacrifice Bill be passed
On 5 September 2019, the Senate Economics Legislation Committee (Committee) released its report in relation to the Treasury Laws Amendment (2019 Tax Integrity And Other Measures No. 1) Bill 2019 (Bill).
As referred to in our Super Alert of 26 July 2019, the Bill proposes to amend the Superannuation Guarantee (Administration) Act 1992 from 1 July 2020 “to improve the integrity of the superannuation system by ensuring that an individual’s salary sacrifice contributions cannot be used to reduce an employer’s minimum superannuation guarantee (SG) contributions”.
The Committee has recommended that Bill be passed (with a few amendments made to the parts of the Bill which deal with non-superannuation related matters).
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Treasury consultation – Miscellaneous superannuation changes
On 6 September 2019, the Treasury released for consultation an exposure draft Bill and associated regulations entitled Treasury Laws Amendment (Measures for a Later Sitting) Bill 2019: Miscellaneous Amendments (Bill).
According to the exposure draft Explanatory Memorandum, the Bill proposes to make the following amendments (amongst other changes):
- Amend the SIS Act “to clarify when a person has been ‘involved’ in a contravention of a provision, other than an offence provision”;
- Amend the new Protecting Your Super laws “to apply the existing fee cap on low balances when a product is only held for part of an income year” and require members to provide elections directly to trustee “if the member does not want his or her account to be an inactive low balance account” (instead of the ATO); and
- Amend the “Income Tax Assessment Act 1997 to ensure that the provisions relating to downsizer contributions operate as intended”.
Submissions on the exposure draft Bill and regulations close on 27 September 2019.
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Draft legislation released in relation to ASIC’s proposed enforcement powers
On 11 September 2019, Treasury released for consultation a number of pieces of draft legislation in relation to the recommendations made by the ASIC Enforcement Review Taskforce Report. According to Treasury, the draft legislation:
- “Strengthens ASIC’s licensing powers by replacing the AFS Licence requirement that a person be of ‘good fame and character’ with an on-going requirement that they be a ‘fit and proper person’;
- Aligns the penalties for false and misleading statements in AFS and Australian Credit Licence applications;
- Extends ASIC’s powers so that they may ban a person from performing functions in a financial services or credit business. The legislation also expands the grounds on which ASIC can issue banning orders;
- Harmonises ASIC’s Search Warrant powers across different Acts and brings them into line with the search warrant powers in the Crimes Act; and
- Allows interception agencies to provide lawfully intercepted information to ASIC for serious offences that ASIC can investigate or prosecute”.
Submissions on the consultation close on 9 October 2019.
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Bill to remove grandfathered commissions passes House of Representatives
On 11 September 2019, the Treasury Laws Amendment (Ending Grandfathered Conflicted Remuneration) Bill 2019 (Bill) moved to the Senate after being passed by the House of Representatives on 10 September 2019.
As referred to in our Super Alert of 2 August 2019, the Bill will enact the Government’s proposal “to ban the grandfathering of conflicted remuneration paid to financial advisers”.
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ATO reminder in relation to timing of First Home Super Saver release authorities
On 11 September 2019, the ATO issued a news alert in relation to processing First Home Super Saver (FHSS) release authorities as the ATO has “found a large number of funds aren’t meeting their obligations to action FHSS release authorities within the required timeframe”. The ATO reminds trustees that they must “action all FHSS release authorities issued by the ATO within 10 business days of the date of issue”.
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Bill to amend SG Act moves to Senate
On 12 September 2019, the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2019 (Bill) passed the House of Representatives and now proceeds to the Senate.
As referred to in our Super Alert of 26 July 2019, the Bill lapsed upon the calling of the Federal Election but has been re-introduced in order to amend the Superannuation Guarantee (Administration) Act 1992 to “allow individuals to avoid unintentionally breaching their concessional contributions cap when they receive superannuation contributions from multiple employers. Instead of receiving contributions into superannuation, an employee may apply to the [ATO] to opt out of the SG regime in respect of an employer and negotiate with the employer to receive additional cash or non-cash remuneration”.
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This alert was written by Natalie Cambrell, Partner and Sanela Osmanovic, Associate.