This report concerns the Australian government’s plans to provide for new reasons to support early release of superannuation benefits on compassionate and severe financial hardship grounds.
To subscribe to GMS Flash Alert, fill out the subscription form.
Late last year, a "Further consultation and draft proposals paper” (“the paper”) on widening access to early release of superannuation was released by Australia’s Treasury for public comment and submissions will be received until 15 February 2019.1 Proposals being considered concern:
This GMS Flash Alert focusses on the “access to superannuation” proposal. (All dollar figures expressed are Australian dollars.)
The rules have remained largely unchanged since the late 1990s, so this is an important development for individuals who, if the proposals are implemented, will have greater access to their superannuation benefits in exceptional circumstances. This could help relieve the financial burdens that individuals face in a variety of “hardship” circumstances.
In terms of the proposals related to improved administration, the process for consumers would be simplified, as they would be dealing with the Australia Taxation Office (ATO), in effect having a “one stop shop” for their severe financial hardship applications.
What is unclear at this stage is whether the proposed early access rights would disqualify Australian superannuation for any foreign country tax concessions available for foreign pension funds.
First announced by the federal government in December 2017, Treasury’s review of the framework for the early release of superannuation benefits on compassionate and severe financial hardship grounds continues to make slow but steady headway.
The paper’s proposals concern:
The proposals build on the current compassionate ground conditions of release that include medical treatments/medical transport, accommodating disabilities, palliative care, expenses relating to the passing of a dependant, and preventing foreclosure or forced sale of a home.
There was also a suggestion to expand access to early release of superannuation to include rental arrears; however, following a lack of support, this ground has been omitted from the final proposals.
To improve administration relating to early release on compassionate and severe financial hardship grounds, it is also proposed that:
1 See the 21 November 2018 announcement from Australia’s Assistant Treasurer, the Hon Stuart Robert.
Also see “Review of the early release of superannuation benefits,” on the Treasury website.
In this edition we provide details on changes to the immigration landscape for 2019. Australia’s government is currently piloting a visa initiative in South Australia – Supporting Innovation in South Australia (SISA). Our update provides details on how to participate in SISA, the cost as well the benefits of the initiative. Our January update also looks at:
The information contained in this newsletter was submitted by the KPMG International member firm in Australia.
©2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation.
Liability limited by a scheme approved under Professional Standards Legislation.
For more detail about the structure of the KPMG global organisation please visit https://home.kpmg/governance.
Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.