The Government intends to allow domestic violence victims to access their own superannuation to meet “unexpected costs”.
Under the Government plan – the Women’s Economic Security Package, announced alongside the Women’s Economic Security Statement – victims of domestic and family violence would be able to apply to withdraw up to $10,000 of their superannuation in a 24 month period.
A statement by Assistant Treasurer Stuart Robert said: “Domestic and family violence can have lasting financial impacts on its victims, and the Government is extending eligibility of the early access to superannuation to help fund the costs of rebuilding the lives of victims and their families.”
A start date for this change was not given. Minister Robert said the measure would be a subject in “additional consultation” as part of the ongoing review of early release of superannuation.
Update: The Government has released a new consultation paper on changes to the early release of superannuation.
Almost a year since start of review of early access to superannuation
The announcement that domestic violence victims would have access to their superannuation comes almost twelve months after the Government commenced a review of the rules around the legal early access to superannuation.
Kelly O’Dwyer, at the time in her role as Minister for Revenue and Financial Services, announced a review of the early access to superannuation rules in December 2018 – including potentially allowing victims of domestic violence to access their super, allowing victims of crime to access the superannuation of perpetrators and reforms to use of super for medical expenses.
Between May and June 2018 the Government consulted further on how victims of crime could access the superannuation of perpetrators.
The statement by Minister Robert said the Government would have more to say on the review of early release of super “shortly”.
Women’s Economic Security Statement a “missed opportunity”
While the domestic violence measure has been welcomed, the Women’s Economic Security Statement has been criticised by some in the superannuation industry. The Australian Institute of Superannuation Trustees (AIST) labelled it a “missed opportunity”.
AIST CEO Eva Scheerlinck said the domestic violence measures were welcome, but was disappointed the Government hadn’t included other key measures to help women have a dignified retirement.
“Women need economic security throughout their lives, which includes financial security for an increasingly long retirement,” Ms Scheerlinck said.
“The broken work patterns of many women, coupled with the persistent gender pay gap, mean there is an urgent need for targeted measures to prevent many Australian women retiring in poverty.”
AIST says the package should have included removing the $450 threshold for Super Guarantee, paying super on paid parental leave, an additional super contribution for low income earners and a “firm commitment” to the timetable for a 12% SG rate.
Industry Super Australia likewise said it was “disappointing” the Women’s Economic Security Statement didn’t include a commitment to superannuation on paid parental leave.
“Women still provide the lion’s share of care to children, ageing parents and grandkids in a system unforgiving of broken work patterns,” said Industry Super head of consumer advocacy Sarah Saunders.
“Adding super to paid parental leave would help women build their retirement savings,” she said.
Unlike the other industry groups, the Association of Superannuation Funds of Australia (ASFA) didn’t criticise the lack of measures in the Statement, and said it would “work closely” with the Government on the announced measures.
Superannuation information sharing system for family court
The Government also intends to make it easier to track down superannuation assets in family court matters.
$3.3 million will be given to the ATO to develop an “electronic information-sharing system” so that family law courts have better visibility of superannuation assets when making property orders.
“Separating couples will have access to faster and fairer family law property settlements as a result of this new system which will make it easier to identify lost or undisclosed superannuation assets,” said a joint ministerial statement.
“Giving the courts access to superannuation information held by the ATO is expected to result in faster and fairer family law property settlements. It will help parties in family law proceedings, particularly women, avoid the cost and complexity involved in seeking superannuation information from multiple superannuation funds, or subpoenaing employment records.”
“It will also provide the family law courts with a more accurate and reliable source of superannuation information to inform a property settlement, and result in more just and equitable outcomes.”
Attorney-General Christian Porter said it could be “complex, time‑consuming and costly” to get a view of superannuation assets in family law matters, “often requiring parties to go on ‘fishing expeditions’ using subpoenas and other formal court processes, with no guarantee of success”.
“This new system will ensure faster and fairer resolutions of family law property disputes,” he said.
Minister for Women Kelly O’Dwyer said: “The Coalition Government’s Women’s Economic Security Statement is delivering practical measures to help give women greater choices about their lives and to build financial security for themselves and their families.”
“Improving the visibility of superannuation assets in family law proceedings is particularly important for Australian women.”
The new system is expected to be operational on 1 July 2020.