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Super legislation and regulatory update

Media release - 21 July 2023

AFCA Jurisdiction

Bill: Treasury Laws Amendment (Measures for Consultation) Bill 2023: AFCA jurisdiction to hear superannuation matters Bill

Summary: Treasury has released exposure draft legislation intended to broaden the jurisdiction of the Australian Financial Complaints Authority (AFCA). This Bill seeks to address the consequences of the recent Federal Court decision in MetLife v Australian Financial Complaints Authority [2022] FCAFC 173. The decision held that AFCA did not have jurisdiction to hear complaints relating to superannuation unless the complaint was specifically listed in section 1053(1) of the Corporations Act 2001 (Cth).

  • complaints specifically listed in section 1053 will be treated as superannuation complaints and will be subject to the additional provisions set out in Part 7.10A, Division 3, and
  • other complaints relating to superannuation will be able to be heard in AFCA's non-superannuation jurisdiction.

Stage: Consultation process has been completed.

Work test determination

Document: Taxation Administration (Remedial Power – Work Test for Personal Superannuation Contributions) Determination 2023

Summary: The Deputy Commissioner of Taxation made a determination in the form of the Taxation Administration (Remedial Power - Work Test for Personal Superannuation Contributions) Determination 2023. The instrument modifies the operation of subsection 290-165(1A) of the ITAA97.

The modification ensures that individuals aged 67 to 75 years who are employees under the expanded definition of "work test" in section 15A of the Superannuation Industry Supervision Act 1993, remain eligible to claim a deduction for their personal superannuation contributions.

Stage: The determination was announced on 10 May 2023.

Consumer Data Right Expansion to Super on Pause

Document: Consumer Data Right updates

Summary: The Government announced the expansion of the Consumer Data Right (CDR) to superannuation, insurance and telecommunications has been paused to allow time to ensure the CDR is working as effectively as possible within the existing banking sector. The CDR will continue to extend into the non-bank lending sector and energy industries as planned.

Stage: On pause. Update provided 26 May 2023.

Your Super, Your Choice Review Defined Benefits

Document: Review of the amendments to the Superannuation Guarantee (Administration) Act 1992

Summary: APRA released findings from a Legislative Impact Assessment of the amendments to the Superannuation Guarantee (Administration) Act 1992 (SGAA), introduced by the Treasury Laws Amendment (Your Superannuation, Your Choice) Act 2020 (YSYC Act).

The review was required to assess any unintended consequences of the expanded choice of fund rights for defined benefit (DB) schemes, including the ongoing viability and profitability of these schemes. APRA’s review did not identify any unintended consequences on the operation or ongoing viability and profitability of defined benefit schemes that can be attributed to the amendments to the SGAA.

As a result, APRA’s view is that no further amendment to the SGAA or any other Act is required as a consequence of the YSYC Act amendments.

Stage: APRA released findings on 10 May 2023.

AFCA Report on Systemic Issues

Document: AFCA Systemic Issues Insights Report

Summary: AFCA released the second edition of their Systemic Issues Insights Report for Quarters 1 and 2 for the 2022-23 financial year. The report contains case studies, findings and key insights into systemic issues raised across the financial services industry, including superannuation, for the period.

Relevant to superannuation, AFCA reported five systemic issues as identified and confirmed within the period. AFCA also detailed two superannuation case studies, both relating to systemic issues identified in the administration of insurance benefits.

Stage: AFCA published the report on 24 May 2023.

Modern Slavery Report Review

Document: Report of the statutory review of the Modern Slavery Act 2018 (Cth)

Summary: The Attorney General tabled their Report of the statutory review of the Modern Slavery Act 2018 (Cth) with Parliament. The Report sets out the findings of the review and makes 30 recommendations for changes to the Modern Slavery Act 2018 (Cth) ('the Act').

The recommendations include:

  • The Australian Government discuss the definition of 'modern slavery' with other jurisdictions as it relates to reporting laws
  • Amend the definition of 'reporting entity' to one with a consolidated revenue of at least $50 million for the reporting period, and further examine how this may be defined
  • Amendments to the mandatory reporting criteria and new inclusions such as reporting incidents, complaints, risk management practices
  • Amendments to the Guidance for Reporting Entities
  • Introduction of administrative improvements such as templates and online accessibility for submission of modern slavery statements
  • Introduce penalties for specific non-compliance.

Stage: Report published on 25 May 2023.