Government considers two options to allow victims of crime access to super

Nest egg, superannuaiton, SMSF, retirement
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The Government is consulting on two different models allowing victims of crime to access the superannuation of perpetrators.

The first model would create a claw-back mechanism for ‘out of character’ superannuation contributions.

Under the proposal a victim of crime with an unpaid compensation order could apply for a court order for the super fund of the perpetrator to release ‘out of character’ contributions made since the six months prior to the perpetrator being charged.

The consultation paper says ‘out of character’ contributions could be determined by a “subjective assessment” by the super fund trustee or a court. Alternatively all voluntary contributions could be included, “as a proxy for out of character contributions”.

The second potential model has victims of serious crimes being able to access any superannuation of the perpetrator – not just ‘out of character’ contributions – where a compensation order hasn’t being paid.

Under the model a serious crime would involve violence against an individual, with a maximum custodial sentence of 10 years or more.

“The rules should ensure superannuation does not become a first resort for compensation for alleged criminal activity that results in a civil claim for damages,” says the consultation paper.

In both cases the lump sum would be tax-free in the hands of the victim.

“The Government is particularly interested in views on the likely effectiveness of the draft proposals, including their interaction with existing state and territory criminal and civil procedures,” says the Treasury.

Submissions are open until 15 June 2018.

The Government was also consulting on potential changes to allow victims of domestic violence to access their own superannuation, and changes to the early access rules – particularly around medical expenses. The Treasury website says the department would make recommendation on the areas to the Government “in early 2018”, though it is unclear if this has yet happened.

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