This week’s Super Alert contains yet more COVID-19 updates, as well as noting some new and proposed legislation including (finally) the permanent tax relief for merging superannuation funds.
Six-month deferral of Royal Commission Implementation Roadmap dates
On 8 May 2020, the Treasurer announced that all the dates in the Royal Commission Implementation Roadmap have been extended by 6 months.
Among other things, that affects:
- Legislation to introduce laws about ‘no other role for trustees’, ‘no hawking’ and ‘limitations on MySuper advice fees’ – being postponed until December 2020; and
- Legislation to introduce laws for the Financial Accountability Regime – being postponed until 30 June 2021.
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ASIC’s deferral of design and distribution obligations
On 8 May 2020, ASIC announced that it ‘will defer the commencement date for the design and distribution obligations until 5 October 2021. The deferral of these reforms follows, and is consistent with, the Government’s announcement…to defer by six months the implementation of commitments associated with the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry as a result of the significant impacts of COVID-19.’
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ATO system upgrades for COVID-19 early release requests
On 11 May 2020, the Assistant Treasurer issued a media release in relation to the COVID-19 early access to superannuation scheme. Processing by the ATO was paused on Friday 8 May but resumed on Monday 11 May. He stated that the pause was to allow for system upgrades required ‘in response to new techniques criminals are using to try to steal Australians’ identities’.
He noted that ‘[a]dditional risk filters will also be applied by the ATO on all files before they are delivered to funds, and additional information will be provided to funds to assist them in discharging their own obligations to apply fraud prevention processes’.
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APRA – COVID-19 early release weekly data
On 11 May 2020, APRA issued its weekly ‘COVID-19 Early Release Scheme’ report in relation to statistics for applications received between 27 April and 3 May 2020.
The report states for that period: ’96 per cent of payments were made within five business days of receiving applications from the ATO. Superannuation funds had issued early release payments to 830,024 members, worth a total of $6.3 billion and with an average payment of $7,629.’
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New superannuation Bills introduced
On 13 May 2020, the following three Bills were introduced into the House of Representatives:
- Australian Prudential Regulation Authority Amendment (APRA Industry Funding) Bill 2020;
- Superannuation Supervisory Levy Imposition Amendment Bill 2020; and
- Treasury Laws Amendment (More Flexible Superannuation) Bill 2020.
As indicated by their titles, the first two Bills are largely unremarkable, but the third Bill proposes to enact the previously-announced measure to ‘enable individuals aged 65 and 66 to make up to three years of non-concessional superannuation contributions under the bring forward rule’ commencing on 1 July 2020.
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Permanent tax relief – merging super funds
On 14 May 2020, the Treasury Laws Amendment (2020 Measures No. 1) Bill 2020 passed both houses of Parliament without amendment. It now awaits Royal Assent.
It includes a range of measures, but importantly for superannuation it implements the ‘Permanent tax relief for merging superannuation funds’ 2019-20 Budget measure.
Therefore, it makes permanent the current temporary arrangements for ‘loss relief and asset rollover that provide relief from CGT liabilities to superannuation funds in the event of fund mergers and transfer events’ which was due to expire on 1 July 2020.
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This article was written by Natalie Cambrell, Partner and Sanela Osmanovic, Senior Associate.