Sean Fannin, GBST’s Technical Legislation Consultant reviews the latest legislation that could affect wealth management administration platforms.
Overview
COVID-19 compassionate grounds condition of release
As part of the response to the economic conditions created by the COVID-19 pandemic, the government introduced the Coronavirus Economic Response Package Omnibus Bill 2020, which received Royal Assent on 24 March 2020.
This Act included a temporary COVID-19 compassionate grounds condition of release, which allowed eligible individuals to be paid up to $20,000 from their superannuation, with a one-off maximum payment of $10,000 before 1 July 2020, and a maximum one-off payment of $10,000 between 1 July 2020 and 31 December 2020.
The Treasury Laws Amendment (More Flexible Superannuation) Act 2021 made amendments allowing amounts paid to an individual under the COVID-19 compassionate grounds condition of release to be re-contributed to superannuation. Re-contributions can only be made between 1 July 2021 and 30 June 2030.
On the 12 and 13 August 2021, the ATO released CRT Alerts that provide guidance on the operation and administration of re-contributing amounts paid to individuals under the temporary COVID-19 compassionate grounds condition of release.
Details
A member of a superannuation fund who re-contributes an amount released under the COVID-19 compassionate grounds condition of release needs to complete an approved form and provide this to their superannuation fund trustees before, or at the time, the contribution is made.
On 12 August 2021, the ATO released CRT Alert 008/2021 that details the requirements for the form. The information that needs to be included can be found here: https://www.ato.gov.au/printfriendly.aspx?url=/Super/APRA-regulated-funds/In-detail/News/CRT-Alerts/2021/CRT-Alert-008/2021—Re-contribution-of-COVID-19-early-release-amounts-approved-form-requirements-for-funds/
Note: The ATO advised in CRT Alert 008/2021 that they intend to have a finalised approved form available on their website by the end of August 2021.
On 13 August 2021, the ATO released CRT Alert 009/2021 that provides information to superannuation fund trustees on the administration of re-contributed amounts paid under the COVID-19 compassionate grounds condition of release. The information includes:
- Re-contributed temporary COVID-19 compassionate grounds condition of release amounts do not count towards the individual’s non-concessional contributions cap;
- Individuals can make these re-contributions to any superannuation fund subject to the governing rules of the fund;
- Each re-contributed amount must be detailed on a separate approved form and cannot exceed $20,000.
After receiving an approval form and the re-contribution, superannuation fund trustees need to:
- Report the amount to the ATO via the Member Account Transaction Service (MATS) as a personal contribution; and
- Provide the ATO with information from the approved forms each month.
Note: Nil lodgment reports are not required.
Who will this impact?
The implementation of the approved form for the re-contribution of COVID-19 compassionate grounds release amounts are a superannuation fund trustee responsibility.
There may be some impact that requires the reporting of information to the ATO via the Member Account Transaction Service (MATS). Further, superannuation fund trustees are required to record and hold information prior to it being sent to the ATO. This is because the ATO is currently developing the functionality for superannuation fund trustees to send the required information to the ATO. The ATO said they will advise trustees as to when they can send this information.
References
Australian Taxation Office – CRT Alert 008/2021 – Re-Contribution of COVID-19 Early Release Amounts Approved Form Requirements for Funds:
https://www.ato.gov.au/printfriendly.aspx?url=/Super/APRA-regulated-funds/In-detail/News/CRT-Alerts/2021/CRT-Alert-008/2021—Re-contribution-of-COVID-19-early-release-amounts-approved-form-requirements-for-funds/
Australian Taxation Office – CRT Alert 009/2021 – Administrative Arrangements for COVID-19 Re-Contribution Amounts:
https://www.ato.gov.au/printfriendly.aspx?url=/Super/APRA-regulated-funds/In-detail/News/CRT-Alerts/2021/CRT-Alert-009/2021—Administrative-arrangements-for-COVID-19-re-contribution-amounts/
Disclaimer
The material included in this blog is designed and intended to provide general information in summary form on a topic which is current at the time of publication. The material may not apply to all jurisdictions. The contents are not intended to constitute legal, business, or other professional advice. It is provided as general information only and is not intended to be comprehensive or a substitute for advice from a qualified professional such as a solicitor. Formal legal advice should be sought in particular matters. GBST Holdings Limited ACN 010 488 874 (“GBST”) makes no statements, representation or warranties about the accuracy or completeness of the information and you should not rely on it. GBST’s blogs may sometimes contain links to other websites for further information. GBST makes no representation or warranty as to the accuracy or validity of information or material on those sites. GBST is not liable for content on those websites. GBST will not be liable to you or any other person for any loss or damage (whether direct, indirect, consequential, or economic), however caused and whether by negligence or otherwise, which may result directly or indirectly from reliance on information contained in GBST’s blog.
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Posted in: Wealth Management Administration
