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ATO suspends SuperMatch amid increasing fraud complaints
The ATO has disconnected SuperMatch to all funds due to identify fraud concerns.
The fraud concerns concern member accounts being established with funds using the fund’s member join portal. Requests are then made to rollover ATO held monies and rollovers in from other funds using SuperMatch.
According to the ATO and APRA, some funds’ online account creation controls are not sufficiently strong to prevent potentially fraudulent online account creation.
From Wednesday this week, the ATO suspended SuperMatch “until such time as the industry can work with the ATO to provide increased certainty that they have mitigated the risk of weak online account creation controls”.
The ATO, APRA, ASIC and AUSTRAC have commenced industry discussions on options for how fund access to SuperMatch can be re-established based on improved online account creation controls across the industry.
While SuperMatch will be temporarily disconnected to all funds, individuals will continue to be able to consolidate their super in ATO Online via myGov, or by providing rollover details to their new fund so the rollover can be requested.
Meanwhile, the Tax Practitioners Board (TPB) has today warned the community and businesses to take extra care when seeking assistance in accessing the government's COVID-19 stimulus measures, including the early release scheme.
TPB says it has identified a growing number of complaints and intelligence about fraudsters posing as tax experts, providing misleading advice and support relating to COVID-19 stimulus benefits, often provided on a 'no benefit - no fee' basis. The arrangements are often promoted through social media channels, claim to offer advice and support along with unnecessary services in a subscription or locked-in contract. Some of these arrangements involve businesses with thousands of clients, TPB said.
Deferral of Retirement Income Review
The Government this week deferred by one month until late July the due date for its retirement income review due to the interruption of the COVID-19 crisis.
Retirement income review chairman Mike Callaghan requested the report's due date be extended to no later than July 24, from a previous deadline of June.
Early release update
More than 1.6 million Australians have now applied for early release super under the Government’s COVID scheme.
The latest statistics show that early release worth $13.2 billion has been accessed, with the average amount withdrawn at $8165.
ASIC releases FAQs on zero or low balances due to early release
As reported in an AIST policy alert on Monday, ASIC has this week updated its COVID 19 Frequently Asked Questions (FAQs) to cover its expectations around trustee communication to members with zero or low balances due to the early withdrawal of their super through the government’s COVID scheme.
The update includes three new questions related to the issuing of exit statements for members with zero balances due to early release; communicating to members who have a zero or low balance to due early release; and the regulator’s expectations regarding the impact of COVID 19 on members’ insurance within superannuation.
In relation to exit statements, ASIC says trustees must make “reasonable efforts” to provide a member with an exit statement within one month after becoming aware that the former member ceased to hold the product. The regulator acknowledges that some trustees may need to process many exit statements in a short period of time.
When communicating with members who have a zero or low balance due to accessing early release, ASIC says communications should, at a minimum, address whether insurance has ceased and (if relevant) any options and steps for reinstatement of cover.
Trustees should also include content within existing COVID-9 information on the fund’s website on the impact of COVID-19 on insurance inside superannuation. For example, whether loss of employment or reduced work hours results in loss of cover, or a different level of cover, or whether there are changes to how insurance claims will be assessed.
APRA update FAQs on insurance and Successor Fund Transfers
APRA has indicated that in some circumstances where the RSE license of a successor fund does not seek or obtain from a member an insurance opt-in election it will take a facilitative approach.
These circumstances are when:
In an updated FAQ (question 23), APRA has instructed funds to inform APRA and provide details of how they intend to apply the law, including whether they are taking into account future law changes that have been signaled by the Government.
Future direction of Consumer Data Right to be explored
An inquiry into the future direction of Consumer Data Right will examine how this Right could be enhanced and leveraged to boost innovation and competition, and support the development of a safe and efficient digital economy.
Consumer Data Right is due to be introduced into the banking sector in phases from 1 July 2020 and will allow consumers to access data about themselves held by companies, in a format that is readily usable. It is also expected to allow consumers better access to information on the products available to them.
AIST’s submission to the inquiry supported the use of CDR in allowing members to share relevant information with their super funds. However, we emphasised the need for member protection, simple language and also adequate time and sector wide consultation ahead of its rollout.
The inquiry is due report to the Treasurer by September 2020.
For further information please contact AIST’s Policy Analyst, Zach Tung at firstname.lastname@example.org
Life insurers announce COVID TPD initiative
The life insurance industry has moved to protect the Total & Permanent Disability (TPD) cover of people who lose their job, are stood down or have reduced working hours due to COVID 19.
The initiative, announced this week by the Financial Services Council (FSC), aligns with the timeline of the current JobKeeper Payment scheme: It will run to 27 September 2020 and claims must be lodged before 1 January 2021.
The new arrangements mean that individuals will keep the TPD cover they had based on their working arrangements before the COVID pandemic declaration. Participating life insurers will assess TPD claims based on people’s working arrangements as at 11 March 2020 - the date when COVID-19 was declared a pandemic.
Transcript released for last weeks’ superannuation and banking Parliamentary hearing
The transcript is now available for last week’s hearing of the House of Representatives Standing Committee on Economics into banks and the superannuation sector.
Witnesses appearing before the Committee were from Industry Super Australia (page 1-16) and ME Bank (page 16 onwards).
ASIC consults on expiring OTC derivative transaction reporting exemptions
ASIC is seeking feedback on proposals regarding the OTC derivative transaction reporting exemptions that expire on 30 September 2020.
In a letter to AIST, ASIC has asked for feedback on their proposals to either extend or allow to expire a number exemptions that currently apply to the reporting of derivative transactions.
For further information on these proposals and to provide feedback please contact AIST’s Policy Analyst, Zach Tung at email@example.com. The deadline for feedback is 26 June 2020.
Farmers call on governments to help super funds to invest more in agriculture
The Victorian Farmers Federation (VFF) has called on the Victorian and Australian Governments to develop an ‘Agriculture Investment Strategy’ that will incentivise Australian superannuation funds to invest in agriculture.
VFF President David Jochinke said the COVID-19 crisis highlighted the need to rebalance the nation’s investment strategies including for foreign interest in agriculture.
“VFF, Government and super funds should work together on an agricultural investment strategy that turbocharges super fund investment in Victorian farms and the agriculture supply chain more broadly.”
Mr Jochinke said a recent Federal Parliamentary Inquiry estimated that super funds have invested around $1.8 billion or 0.2% in agriculture.
“There is a real investment opportunity, with the right policy settings, to build and secure the supply chains, grow the markets that we distribute produce to and support farm businesses through strategic investments in technology, capital, research and development and education, Mr Jochinke said.