People applying for the early release of some of their superannuation savings, to help deal with financial or medical emergencies, will have greater scope and flexibility under the Government’s proposed new rules.
Last week, the Assistant Treasurer Stuart Robert released the results of a review of the rules governing the early release of super benefits, with some draft proposals. The proposals include several new compassionate grounds:
The issues paper says the definition of severe financial hardship should be relaxed so that individuals would be eligible for early release if they have been receiving qualifying Commonwealth income support payments for 26 cumulative weeks out of 40 weeks (rather than 26 consecutive weeks currently) and meet the living expenses test.
The Government is proposing that multiple releases be permitted on severe financial hardship and family and domestic violence grounds (up to the cap of $10,000 in a 24-month period) so that applicants are not incentivised to withdraw the maximum amount at once.
The paper calls for stakeholder views on the number of other proposals. The Government wants to tighten the eligibility criteria for early release on mental health grounds by replacing “alleviate an acute or chronic mental disturbance” with “treat a diagnosed mental illness or behavioural disorder”.
It wants early access for overseas medical treatment to be available only for a life threatening injury or illness, or where a person lives overseas.
It wants two medical practitioners to certify that the treatment for which early release is being obtained is generally accepted by the medical profession as being “clinically relevant” for the patient’s diagnosed condition.
And it wants early release under the mortgage foreclosure ground to be permitted only once every 24 months.
Also last week, the Minister for Women, Kelly O’Dwyer, released a policy document detailing measures designed to improve women’s workforce participation, earning potential and economic independence.
The wide-ranging package includes improvements to the Workplace Gender Equality Agency, increasing flexibility in the Parental Leave Pay system, support for regional employers that assist women returning to work after a career break, the funding of specialist domestic violence units, and establishing a Future Female Entrepreneurs program.
These policies are designed to close the workforce participation gap. At present 73.2 per cent of women aged 15 to 64 are in the workforce, compared with 82.7 per cent of men.
On the financial front, apart from extending early release of superannuation to victims of domestic and family violence, the Government will expand the No Interest Loan Scheme run by Good Shepherd Microfinance to include women experiencing family and domestic violence. The loans will be available for relocation, essential household items, rental bonds and debt consolidation.
It will improve the “visibility” of superannuation assets in family law proceedings and it will provide family law property mediation services. The policy document says: “Superannuation often represents a significant household asset and, therefore, makes up a large portion of the overall asset pool during separation proceedings. As it stands, where parties to family aw proceedings are not forthcoming about their assets, costly and time-consuming information gathering exercises are required in order to establish the identification of superannuation accounts, let alone their balance.
“The Government will develop an electronic information sharing mechanism between the Australian Taxation Office and the Family Law Courts to allow the superannuation assets held by relevant parties during family law proceedings to be identified swiftly and more accurately.