The Government has introduced a Bill to allow the direct payment of lost super to the terminally ill, extend tax relief for merging super funds and shift responsibility for early release of super to the ATO.
The Treasury Laws Amendment (2018 Measures No. 1) Bill 2018 includes new rules for withholding of GST on new property sales, along with a number of superannuation changes.
Update: The Bill has passed the House of Representatives, but the Senate is not sitting this week. The next Senate sitting is on March 19.
If the Bill is passed, the ATO would be able to pay lost superannuation directly to people with a terminal medical condition. Currently such amounts would first have to be transferred to a superannuation account, in most cases.
“This creates unnecessary delays and paperwork for the terminally ill wishing to access their superannuation benefits,” says the Explanatory Memorandum to the Bill.
Update: The Government has released, for consultation, draft regulations to complement the Bill. The consultation period ends 23 March 2018.
“The regulations require the ATO to directly notify a member’s superannuation trustee when it has authorised the early release of funds, removing the need for that trustee to independently confirm the amount authorised for release,” said Minister for Revenue and Financial Services Kelly O’Dwyer.
“At what are often times of great stress and concern for the individuals involved, these changes will cut the administrative burden for superannuation trustees and will help successful applicants receive their authorised funds sooner.”
The Government had announced in the 2015/16 Budget a relaxing of the criteria around the terminal medical early release condition. Allowing direct payment was included in the Treasury Legislation Amendment (Repeal Day 2015) Bill 2016, but this lapsed in April 2016.
The 2018 Measures Bill also shifts responsibility for the release of superannuation on compassionate grounds from the Department of Human Services to the ATO.
“The transfer of the regulator role to the Australian Taxation Office is intended to build on this existing relationship and to streamline the processes for the early release of superannuation benefits for both individuals and superannuation funds.”
As announced in the 2017/18 Budget, tax relief for merging superannuation funds would be extended to 1 July 2020. Currently the temporary tax relief is set to expire on 1 July 2019.
The Government would also be able to recover the ongoing cost of governance of the ‘superannuation transaction network’, part of SuperStream, from the superannuation supervisory levy.
The Bill was introduced, read a first and second time and then debate adjourned, as is common practice.