Super Alert – 17 April 2020

17 April 2020

In this week’s Super Alert we look at the relief being provided by ASIC in relation to COVID-19 financial advice, APRA in relation to CPS 234 and further updates from the ATO and APRA in relation to the early release of super.

Further ATO updates on COVID-19

On 9 April 2020, the ATO issued the following alerts:

  • CRT Alert 011/2020, announcing that the ATO will provide ‘an electronic lodgement option for First Home Super Saver Scheme (FHSSS), Division 293 and Excess Contributions Release Authority Statements’; and
  • CRT 13/2020, advising that as at 8 April, there had been ‘617,800 registrations of interest’ for the early release of super.

On 15 April 2020, the ATO made further updates to ‘Design and implementation information pages’ for COVID-19, included updating its Q&A document.

Please click hereherehere and here to read more.

Proposed amendments to SG rules for JobKeeper payment

On 9 April 2020, the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 were registered on the Federal Register of Legislation. Although no changes directly affect superannuation, the Explanatory Statement notes that future ‘amendments will be made in respect of the superannuation guarantee rules…[to] ensure that an employer will only need to make superannuation contributions for any amount payable to an employee in respect of their actual employment, disregarding any extra payments made by the employer to satisfy the wage condition for getting the JobKeeper payment’.

Please click here to read more.

ASIC provides COVID-19 relief for financial advice

On 14 April 2020, the ASIC Corporations (COVID-19 – Advice-related Relief) Instrument 2020/355 (Instrument) was registered on the Federal Register of Legislation. Amongst other things, it provides that financial advisers:

  • Have ‘additional time to provide a Statement of Advice (SOA) to clients in relation to urgent, time-critical COVID-19 advice’;
  • Can ‘give financial product advice to clients about the early release of their superannuation, without the obligation to provide an SOA when certain conditions are met’; and
  • Can provide ‘a Record of Advice…rather than an SOA, in relation to COVID-19 advice in certain circumstances’.

The date of effect of the Instrument is 15 April 2020.

Please click here to read more.

ASIC issues ‘no-action’ notice in relation to intra-fund advice for early release of super

On 14 April 2020, ASIC issued a notice to all trustees confirming that ‘ASIC will not take action in relation to personal advice about the COVID-19 early release scheme provided as intra-fund advice, on the basis that it breaches s99F [of the SIS Act]’. However in order to rely on the position, trustees must:

  • Inform ASIC by email that they will rely on the position;
  • Ensure that the member sought the advice ‘rather than the trustee or other relevant provider initiating the advice’;
  • ‘Determine that, in [the trustee’s] opinion, the member is likely to be eligible for the COVID-19 early release scheme’;
  • Prior to providing the advice:
    • ‘clearly describe the scope of the advice’;
    • ‘make the member aware of relevant public factual information and existing general advice of the fund concerning the COVID-19 early release scheme’; and
    • ‘confirm that notwithstanding this information and the advice, the member wishes to seek more advice’.
  • If the advice is provided by an external entity, ‘this must be done at a cost to the fund consistent with the trustee’s best interest duty and in line with the expectation that the only advice to be given is directly related to whether to access the COVID-19 early release scheme’.

ASIC has advised that its position is temporary and will expire on 24 September 2020.

Please click here to read more.

APRA allows trustees to extend CPS 234 third party compliance date

On 16 April 2020, APRA announced that it will consider requests from trustees to defer the commencement date for third-party arrangements that are required to be reviewed under CPS 234. The commencement date for this part of the standard is 1 July 2020. However, trustees can request a six-month extension to 1 January 2021 by advising ‘APRA of the nature of their third-party arrangements, and how they are monitoring the risks associated with these arrangements’.

Please click here to read more.

APRA updates COVID-19 FAQS

On 16 April 2020, APRA added two more questions to its COVID-19 frequently asked questions that were referred to in our Super Alert of 3 April 2020. The added questions are:

  • ‘In dealing with payments to members under the release of benefits on compassionate grounds (COVID-19), what are APRA’s expectations of RSE licensees in terms of processing the payments?’; and
  • ‘In circumstances where RSE licensees follow the approach set out in these FAQs but fraud nonetheless occurs, what is APRA’s position on civil penalty action and trustee liability?’.

Please click here to read more.

This article was written by Natalie Cambrell, Partner and Sanela Osmanovic, Senior Associate.


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