The first changes to ECPI, along with measures to provide greater visibility to superannuation fund information sharing for family law proceedings, have now passed Parliament.
Changes to ECPI and visibility of super assets pass Parliament
The Treasury Laws Amendment (2021 Measures No. 6) Bill 2021 passed both houses of Parliament on Thursday.
The bill includes one of the two proposed measures affecting ECPI amending the requirement for actuarial certificates for certain superannuation funds. The bill amends the ITAA 1997 to remove the requirement for superannuation trustees to provide an actuarial certificate when calculating exempt current pension income using the proportionate method, where all members of the fund are fully in retirement phase for all of the income year.
“Schedule 3 to the bill removes a redundant requirement for superannuation trustees to obtain an actuarial certificate when calculating its exempt current pension income when all the fund members are fully in the retirement phase for their entire income year,” MP David Gillespie said in the reading of the bill.
“This measure will reduce costs and simplify reporting for affected superannuation funds by streamlining an administrative requirement for the calculation of exempt current pension income.”
The amendment will commence on 1 October after the bill receives royal assent.
The legislation also contains new measures to improve the visibility of superannuation assets in family law proceedings.
The amendments will allow the Australian Taxation Office (ATO) to release superannuation information to a family law court upon request.
To obtain this information, an applicant will have to be a party to a family law property proceeding and apply to a family law court registry to request their former partner’s superannuation information, held by the ATO. Parties will then be able to use this information to seek up-to-date superannuation information from their former partner’s superannuation fund.
Superannuation and financial services minister Jane Hume said superannuation is a significant and growing asset for many Australians and it is vital for equity in the family law system that assets can be identified in proceedings and divorce in a way that is both timely and accurate.
“These amendments will make it harder for parties to hide or under-disclose their superannuation assets in family law property proceedings, and will reduce the time, cost and complexity for parties seeking information about their former partner’s superannuation,” Ms Hume said.
“Access to this information will better support separated couples to divide their property on a just and equitable basis. This will help alleviate the financial hardship and negative impact on retirement incomes that women in particular can experience after separation.
“Parties to property proceedings under the Family Law Act 1975 will be able to apply to family law court registries for access to superannuation information from 1 April 2022.
“This is an important change that promotes equity in our super system, and is particularly important to Australian women.
“These legislated changes mean that no party to a divorce proceeding will be able to use cost or difficulty as leverage to ignore the disclosure of superannuation assets.”