NEWS – Caution sounded on proposed early release of super for crime victims, as well as hardship cases

NEWS – Caution sounded on proposed early release of super for crime victims, as well as hardship cases

NEWS – Caution sounded on proposed early release of super for crime victims, as well as hardship cases

The government has been told to tread carefully with its plans for allowing victims of crime to access perpetrators’ superannuation as compensation, as the proposals could have unintended consequences, one lawyer has warned.

Speaking to SMSF Adviser’s sister title, Nest Egg, Dwyer Lawyers principal Dr Terry Dwyer, said that while he isn’t necessarily against the proposal, he wants to “sound a note of caution” about the potential consequences. Mr Dwyer said any moves to allow early access to superannuation should be carefully considered as they can weaken confidence in the superannuation system, give people an incentive to shift assets offshore and, in the case of early access for victims of crime, could impact the perpetrator’s family or beneficiaries.

Treasury recently announced that it will review the current rules governing early release arrangements for super on the grounds of financial hardship, or as compensation for victims of crime. In a statement made last week, Minister for Revenue and Financial Services Kelly O’Dwyer said it was time to review the current arrangements as they relate to severe financial hardship and compassionate grounds to ensure they remain fit for purpose. “This review is one of a range of measures the government is progressing to ensure that the rules governing superannuation serve the interests of consumers.”

Commenting on the review, Mr Dwyer said that it’s an “emotional issue” and that “obviously nobody wants to defend people who are convicted criminals”. “I understand and I have some sympathy for it [the proposal and review] but I think they have to be very, very careful that they don’t jeopardise the ability of accused persons to defend themselves as innocent, or they don’t adversely affect the rights of innocent third parties.”

He expressed concern that asset seizures outside of the profits of crime could inadvertently impact innocent family members who may be beneficiaries. In terms of superannuation, he added: “In one sense you can say it’s the property of the member of the fund but in a real legal sense it’s not; superannuation funds are trusts and the trust monies are always held by the trustee and also for persons other than the immediate member.

“So, if you forfeit a member’s interest, then you’re also stripping their spouse and children of their potential benefits too, so it operates as a sort of stripping away of the contingent rights of other prospective beneficiaries.

“We have heard of sexually transmitted debt – why should women and children be punished for the sins of their husbands and fathers by losing reversionary benefits – or vice versa?”

As for the “really clever criminals”, they may just shift their assets offshore altogether, he added. Read more from Lucy Dean at SMSF Advisor.

What are your Thoughts? Comment below!

Want to learn more, know the options and what we need to retire on, the super system in Australia and what is self-managed super? To get the answers, see our FREE slides Super & SMSF for Business owners.


About SuperBenefitnews

Self-Managed Superannuation Service Providers in Australia. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
This entry was posted in News & Stats, Pensions / Income Streams, Retirement Planning, SMSF Info, Superannuation General and tagged , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s