Super Alert – 26 July 2019

26 July 2019

This week’s Super Alert notes the introduction into Parliament of two superannuation Bills, a report from the Senate Economics Legislation Committee on the Putting Members’ Interests First Bill as well as a variety of materials released by the regulators.

ATO releases guidance in relation to member remediation

On 19 July 2019, the ATO released guidance related to the tax consequences of remediation strategies. The following topics are covered by the guidance:

  • Compensation received by super funds from financial institutions and insurance providers;
  • Fees where no service is provided;
  • Deficient financial advice;
  • Overcharged insurance premiums;
  • Interim use of reserves; and
  • Payments where no right to seek compensation.

Please click here to read more.

APRA releases draft prudential standard for remuneration arrangements

On 23 July 2019, APRA released for public consultation a discussion paper in relation to a proposed new cross-industry prudential standard CPS 511 Remuneration. The purpose of the standard is to “introduce heightened requirements on entities’ remuneration arrangements in response to evidence that existing arrangements have been a factor driving poor consumer outcomes” as recommended by the Royal Commission.

APRA has stated in an associated media release that, among the key reforms, it is proposing the following:

  • “To elevate the importance of managing non-financial risks, financial performance measures must not comprise more than 50 per cent of performance criteria for variable remuneration outcomes;
  • Minimum deferral periods for variable remuneration of up to seven years will be introduced for senior executives in larger, more complex entities. Boards will also have scope to recover remuneration for up to four years after it has vested; and
  • Boards must approve and actively oversee remuneration policies for all employees, and regularly confirm they are being applied in practice to ensure individual and collective accountability.”

Submissions on the discussion paper and draft prudential standard close on 23 October 2019.

Please click here and here.

Senate Committee report tabled in relation to Putting Members’ Interests First Bill

On 23 July 2019, the Senate Economics Legislation Committee tabled its report on the Treasury Laws Amendment (Putting Members’ Interests First) Bill 2019 (refer to our Super Alert 5 July 2019).

The Committee recommended that the Bill be passed, subject to the “the government [changing] the date of commencement to 1 December 2019”. The Committee received 46 submissions to its inquiry and has set out in this report the views expressed by various stakeholders.

Please click here to read more.

Bill re-introduced in relation to various SG changes

On 24 July 2019, the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2019 was re-introduced into the House of Representatives and received its second reading.

As referred to in our Super Alert 26 April 2019, this Bill lapsed upon the calling of the Federal Election earlier this year. The Bill has been re-introduced without the SG amnesty provisions and includes the following measures:

  • 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”;
  • Amend the Income Tax Assessment Act 1997 to “ensure that the non-arm’s length income rules for superannuation entities apply in situations where a superannuation entity incurs non-arm’s length expenses in gaining or producing the income”; and
  • Make changes to limited recourse borrowing for SMSFs.

Please click here to read more.

Bill released to amend salary sacrifice rules

On 24 July 2019, the Treasury Laws Amendment (2019 Tax Integrity And Other Measures No. 1) Bill 2019 was introduced into the House of Representatives and received its second reading speech.

According to the Explanatory Memorandum, in terms of superannuation-related changes, this 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”.

This measure was previously in the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 2) Bill 2017 which lapsed upon the calling of the Federal Election earlier this year.

Please click here to read more.

Various ATO guidance released

On 24 July 2019, the ATO updated its guidance in relation to the following topics:

  • Death benefit income streams – meeting minimum pension payment requirements;
  • Guidance on transfer balance cap reporting; and
  • Transfer balance cap – Commissioner’s commutation authority.

Please click here, here and here to read more.

This alert was written by Natalie Cambrell, Partner, Damian Tarulli, Special Counsel and Sanela Osmanovic, Associate.​

Natalie Cambrell

P: + 61 3 8644 3754


Damian Tarulli

P: +61 7 3169 4832


Subscribe to HWL Ebsworth Publications and Events

HWL Ebsworth regularly publishes articles and newsletters to keep our clients up to date on the latest legal developments and what this means for your business.

To receive these updates via email, please complete the subscription form and indicate which areas of law you would like to receive information on.

Contact us