EXPLANATORY STATEMENT

 

Select Legislative Instrument 2010 No. 186

 

Superannuation Industry (Supervision) Act 1993

Superannuation Industry (Supervision) Amendment Regulations 2010 (No. 2)

 

Retirement Savings Accounts Act 1997

Retirement Savings Accounts Amendment Regulations 2010 (No. 2)

 

Subsection 353(1) of the Superannuation Industry (Supervision) Act 1993 (SIS Act) provides, in part, that the Governor-General may make regulations prescribing matters required or permitted by the SIS Act to be prescribed, or necessary or convenient to be prescribed, for carrying out or giving effect to the SIS Act.

 

Subsection 200(1) of the Retirement Savings Accounts Act 1997 (RSA Act) provides, in part, that the Governor-General may make regulations prescribing matters required or permitted by the RSA Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the RSA Act.

 

The Superannuation Industry (Supervision) Regulations 1994 (the SIS Regulations), inter alia, specify the conditions of release for superannuation benefits from regulated superannuation funds and approved deposit funds.

 

The Retirement Savings Accounts Regulations 1997 (the RSA Regulations), inter alia, specify the conditions of release for superannuation benefits from retirement savings accounts.

 

The purpose of the Regulations is to amend the SIS and RSA Regulations to ensure that Farm Family Support Scheme payments are specified as a Commonwealth income support payment for the purposes of early release of superannuation on severe financial hardship grounds.

 

Individuals are generally not able to access their superannuation benefits until they have reached their preservation age and retired. The SIS Regulations and RSA Regulations specify some exceptions to this rule, including in cases of severe financial hardship. An individual may be eligible for early release of a portion of their superannuation benefits under this condition of release if the trustee of their superannuation fund, the trustee of their approved deposit fund or their retirement savings account provider is satisfied that they have been in receipt of a Commonwealth income support payment for 26 continuous weeks and are unable to meet reasonable and immediate family living expenses.

 

Commonwealth income support payments that qualify for early release on severe financial hardship grounds are specified in the SIS Regulations and the RSA Regulations. Eligible payments include exceptional circumstances relief payments (ECR payments) under the Farm Household Support Act 1992 (FHS Act).

 

The Farm Family Support Scheme (the Scheme) is a pilot of drought policy reform measures that will take place from 1 July 2010 to 30 June 2011. The Scheme includes income support payments to help farmers in hardship from a range of causes to meet basic household expenses. Payments under the Scheme will be established by administrative guidelines and will commence on 1 July 2010.

 

It is intended that recipients of income support payments under the Scheme are subject to the same treatment as recipients of ECR payments. The Regulations will amend the SIS Regulations and the RSA Regulations to include income support payments under the Scheme as a specified Commonwealth income support payment for the purposes of early release of superannuation on severe financial hardship grounds. This will ensure consistent treatment with ECR payments.

 

The Regulations are legislative instruments for the purposes of the Legislative Instruments Act 2003.

 

The Regulations commence on 1 July 2010, to coincide with the commencement of the Scheme.

 

Given that the amendments are intended to ensure that recipients of payments under the Scheme are treated consistently with recipients of the existing ECR payments and that the Scheme is only a 12 month pilot program, no public consultation was conducted.

 

 

 

Authority: Subsection 353(1) of the Superannuation Industry

(Supervision) Act 1993

 

Subsection 200(1) of the

Retirement Savings

Accounts Act 1997