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  • Coronavirus - early release of superannuation industry consultation 24 March 2020

    Key discussion points

    • The Coronavirus Economic Response Package Omnibus Bill 2020External Link passed the House of Representatives on 23 March 2020 and received Royal Assent on 24 March 2020.
    • The design and implementation of the Coronavirus - Early release of superannuation changes will leverage off the existing Compassionate Release process.
    • The legislative requirements come into effect from 25 March 2020 (with applications able to be lodged from mid-April 2020) and will remain in place until 24 September 2020.
    • The changes will allow eligible employees to submit two applications for up to $10,000 each from their Superannuation fund, one application in the current 2019–20 financial year and one in the 2020–21 financial year.
    • Applications can be made up to 30 June 2020 for this financial year and from 1 July 2020 until 24 September 2020 for the next financial year.
    • A large volume of applications, in excess of 3 million are expected, given the current COVID-19 (coronavirus) impacts on the community.
    • Individuals will be required to apply via MyGov as the primary channel; however a manual option will be available for those who can't transact online. An ATO system build is underway for applications to be electronically processed.
    • The ATO will deploy both the electronic and manual solution mid April 2020.
    • The fund will receive a digitised determination regardless of the application being submitted online or manually.
    • Australian citizens and permanent residents are eligible to apply for the scheme. New Zealand citizens with Australian held super are also eligible. Temporary residents are not eligible.
    • The application process is mostly self-assessed. The ATO will manage the eligibility criteria with strict guidelines and messaging for individuals to accurately assess their eligibility. There will also be warnings about penalties for making false and misleading statements to deter inappropriate use.
    • There will be appropriate checks in place to identify and reject duplicate applications and the ATO will be able to undertake post-issue compliance work based on data and other information held in ATO systems.
    • The ATO will follow-up any potentially false or misleading declarations.
    • The ATO online form will display all superannuation accounts (matched from MAAS) a fund has for an individual. The member can then elect to claim a portion of each account up to the value of $10,000 – for example, $5,000 from one fund and a second $5,000 from another fund.
    • Where a member makes an application and the fund has insufficient money to fulfil the application, the member will not be able to make a second application for the balance from another fund/account in that financial year. They will also not able to seek the balance in the 2020–21 financial year above the $10,000 cap.
    • Members will be encouraged to check their account balances with their fund to identify if there are sufficient funds available to claim.
    • Appropriate messaging will be included on the application form to ensure individuals supply the correct bank account information.
    • The fund notifications will be delivered using the current system design via the BDE solution. The final form of the notifications is being worked on (for example, individual notices for each member or a bulk file upload such as a spreadsheet). In either case, funds should ensure they check for notifications daily.
    • The ATO will engage further with funds regarding data file requirements.
    • With the mid-April commencement date, the ATO will consider the impacts of money that is already in transit due to USM reporting.
    • There is currently no set timeframe for when the money is released to the individual, however under the compassionate release measure; the regulations require payment to be made to the individual as soon as practicable and funds cannot require members to submit an application to the fund, releases are to be made based on the ATO determination.
    • APRA to provide guidance on the expectation around the checks to be made by funds before releasing the money – for example, proof of identity.
    • If the application is rejected, the member will be notified via their MyGov account in 2-3 days.
    • There needs to be clear and consistent messaging and communications across all impacted government agencies and funds.
    • The ATO will share with industry the approval and rejection letters when available, as well as FAQs and other relevant communication messaging.
      Last modified: 27 Mar 2020QC 61965