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Govt revises early release forecast to $42 billion
The Government has revised its forecasts for the temporary early release of super and is now predicting $42 billion will be withdrawn from the super savings pool over the two tranches of the scheme.
The revised forecast – disclosed to the media today - represents a $15 billion or 150 percent increase on Treasury’s initial forecast that super withdrawals would reach $27 billion.
In a media release today, AIST said the higher than expected forecast pointed to the need for more government support measures for those suffering financial hardship.
AIST CEO Eva Scheerlinck said the fact that so many Australians are expected to access their super suggested that there were cohorts of people in desperate financial need who were missing out on government support measures such as JobKeeper.
Ms Scheerlinck said withdrawals to date – which amounted to super worth nearly $30 billion – would have long-lasting consequences for low income earners and women, in particular.
“The COVID early release scheme is an income-support system that is very expensive for individuals and cheap for the Government, when it really should be the other way around.”
“With global interest rates close to zero, the Government is well positioned to borrow money that could be used to assist Australians who are struggling. Meanwhile ordinary workers are being forced to withdraw super savings that could be delivering them at least 5-7 per cent in annual interest over the long term.”
Ms Scheerlinck said the legislated increase in the Superannuation Guarantee to 12% would be critical to help boost the retirement savings of working Australians who had accessed super through the COVID scheme.
The Government should also be considering targeted policy measures to help address the COVID super gap, she added.
ASIC releases final updated guidance on complaints handling
ASIC has released its guidance on internal dispute resolutions (IDR), with the timeframe for providing an IDR response to be reduced from 90 calendar days to 45 calendar days, which is to be mandatory by 5 October 2021.
Regulatory Guide 271 Internal dispute resolution was released following extensive industry consultation and replaces the current RG 165. Complaints made before 5 October 2021 will continue to be dealt with under the requirements in RG 165.
Under RG 271, superannuation complaints may take longer than 45 calendar days in instances where there is no reasonable opportunity for the financial firm to provide the IDR response within the relevant maximum IDR timeframe because:
In addition, the maximum IDR timeframe for complaints about death benefit distributions will be 90 calendar days.
ASIC has also provided further clarity with regards to complaints made via social media, confirming that their intention is that the definition of complaints should only include ‘complaints made on a social media channel or account owned or controlled by the financial firm that is the subject of the post, where the author is both identifiable and contactable.’
In the coming months, ASIC will conduct further consultation on the IDR data reporting regime.
AUSTRAC flags extension of applicable customer ID procedure
AUSTRAC has stated it intends to extend the rule regarding the exemption from the applicable customer identification procedure for the purposes of the temporary early release of super scheme.
AUSTRAC acknowledged it plans to change the rule to extend it and are awaiting confirmation from Treasury about what regulatory changes need to be made prior to granting an extension.
The rule is due to expire on 24 September, with the intended change taking it through to December 31, in line with the recent extension to the early release scheme.
Further submissions called for 2020-21 Budget
Individuals and organisations that have already made submissions to the 2020-21 Budget are able to submit supplementary submissions to allow for the evolving nature of the COVID economic situation.
The Minister for Housing and Assistant Treasurer called for further submissions from individuals, businesses and community groups on their views regarding priorities for the 2020-21 Budget. It is expected that the 2020-21 Budget, to be released on 6 October, will outline the Government’s plan for recovery from the impacts of the COVID-19 pandemic.
Individuals and organisations that have already provided submissions are not required to re-submit as submissions already received will continue to be recognised as part of the 2020-21 Pre-Budget Submission process.
AIST has previously made a submission, which made a number of recommendations to improve conditions for members into the future and improve fairness in the retirement system. Given the financial impacts of the COVID-19 pandemic, AIST will be making a supplementary submission focussing on policy solutions to address the COVID super gap.
The Pre-Budget Submission process for the 2020-21 Budget will now close on 24 August 2020. Submissions can be made via the Treasury Consultation Hub.
SG amnesty deadline nears
The ATO and the Australian Small Business and Family Enterprise Ombudsman have increased messaging alerting businesses to the deadline for the unpaid super amnesty, which is set to end on 7 September 2020.
The ATO released a statement advising that it was the last chance for businesses to apply for the SG amnesty without incurring a penalty or having to pay administration fees.
Meanwhile, Australian Small Business and Family Enterprise Ombudsman, Kate Carnell has stated that small businesses should speak to “accredited financial advisers to get their affairs in order before it’s too late,” as well as advising that only payments made before September 7 will be eligible for a tax deduction benefit.