Government commits to making super safer

In response to a parliamentary inquiry into financial abuse, the Australian Government has highlighted a range of reforms aimed at reducing opportunities for financial abuse within the financial systems it oversees.

Financial abuse is a form of family and domestic violence where a person uses money or makes financial decisions to control another person or limit their independence.

As part of its response, the Government pointed to two reforms currently underway in the superannuation sector. Read on for the details.

Blocking abusers from receiving victims' death benefits

The Australian Government will release draft legislation later this year to prevent perpetrators of family and domestic violence from receiving victims' superannuation death benefits.

Currently, a super fund may be required under law to pay a member's death benefit to a person who committed family and domestic violence against them.

The proposed legislation is important because it protects the interests of victims' families, prevents ongoing harm from the abuse and helps to ensure that perpetrators don't benefit financially from their actions.

More powers for the ATO in SMSF rollovers

The Australian Government outlined its ongoing efforts to equip the ATO with expanded powers to prevent rollovers into newly established self-managed super funds (SMSFs) in certain situations. This includes where there are concerns about fraud, misconduct, financial abuse or consumer harm.

The rollover of super from an Australian Prudential Regulation Authority (APRA)-regulated fund to a new SMSF is a high-risk time where scammers or perpetrators of financial abuse could gain control of a person's retirement savings.

This proposed measure is important because it allows the ATO to intervene before retirement savings leave the reach of APRA protections and become more difficult to recover.

Our view

Joann Wilkie, GESB’s CEO, said the reforms reflect a shared commitment to ensuring superannuation remains a source of financial security and support for members, particularly during some of life's most challenging circumstances.

Superannuation exists to provide financial security, not become a source of further harm. We welcome reforms that better protect victim-survivors of financial abuse and strengthen safeguards across the system. As the largest super fund based in WA, we believe the sector has a responsibility to help create a safer experience for members, particularly during times of vulnerability. We look forward to working with the Government to progress these reforms and ensure trust, safety and dignity remain at the heart of the super system.

What next?

We will continue to monitor the progress of these reforms and provide updates as they become available. In the meantime, you can read more about the reforms in the Government's media release.