Policy & Research Archive

AIST Policy News

Further details on first home owners super saver scheme

While draft legislation is yet to be released on the Government’s proposed First Home Super Savers Scheme (FHSSS), Treasury has revealed that the Scheme will be largely administered by the Australian Tax Office, as opposed to super funds.

The Scheme – announced on Budget night – is designed to allow people to make a voluntary contribution to their super account for the purposes of building a deposit for their first home. Contributions (either concessional or non-concessional) up to $30,000 can then be withdrawn when required.

Discussions with Treasury suggest that the ATO will maintain all records involved in the Scheme and a person seeking withdrawal will approach the ATO rather than the fund.  The ATO would calculate how much is payable based on the person’s contributions with a deemed earning rate of the 90 day bank bill rate plus 300 basis points., and will advise the fund to pay that amount. The ATO will also calculate tax payable by the individual.

In the event that the underlying earnings in the fund are less than the deemed amount, there would be an effective dipping into the person’s retirement savings. The amount to be released would be capped at the total of the individual’s account balance; that is, there would be no cross-subsidisation from other members.

Aside from administrative issues, AIST has a number of other concerns with the Scheme, not the least being that it is a radical departure from the objective of super to provide income in retirement. 

AIST has sought further feedback from member funds and is involved in ongoing consultations with Treasury.

Feedback can be sent to Richard Webb at rwebb@aist.asn.au

Report recommends ATO improve awareness on non-compliance

The Inspector-General of Taxation (IGT) has recommended that the Australian Tax Office provide more information to employers about its differentiated approach to non-compliance with SG obligations.

The recommendation is contained in the 2016 IGT report that was only released publicly this week following the Senate Inquiry into Superannuation Guarantee Non-Payment. The report made 11 recommendations, including two for the Government and nine for the ATO to consider. Many of the issues raised in the report were discussed at the Senate Inquiry, which released its own recommendations earlier this month.

The ATO agreed with seven IGT recommendations made, including recommendations that the ATO consider developing a capability for the Small Business Superannuation Clearing House to receive electronic and standardised files to remove the need for manual input. Recommendations around Single Touch Payroll testing and exemptions were also agreed to.

The report also called for the ATO to improve its SG risk identification process by encouraging super fund trustees to refer more relevant data.  It also recommended that the ATO obtain SuperStream payment data from super funds for employers not required to use STP to promptly identify those not reporting or paying SG. The use of deterrents, such as random audits on employers, were also suggested.

Members seeking further information can contact AIST Policy & Regulatory Analyst Richard Webb at rwebb@aist.asn.au

Support for a stronger ASIC breach reporting framework

AIST has supported strengthening and expanding the Australian Securities Investment Commission breach reporting framework for financial services and credit licensees.

AIST’s submission to the ASIC enforcement review argues that the breach reporting framework should be expanded to include significant breaches or other misconduct by employees or representatives. This complements the Future of the Financial Advice reforms which introduced obligations at the employee/representative level and is in line with breach reporting requirements in many other countries.

AIST’s submission also supports increasing maximum penalties, introducing civil penalties and infringement notice regimes.