In December 2017, the Government commenced a review into early release of superannuation on severe financial hardship and compassionate grounds. As part of this process it sought views on whether superannuation should be available to meet unpaid victims of crime compensation orders.
The Review received over sixty submissions in response to its initial consultation paper. It also held ten roundtables and conducted several bilateral meetings with stakeholders.
On 26 March 2018, the Minister for Revenue and Financial Services announced that the Government would legislate to ensure that victims of serious crimes will be able to access the perpetrator’s superannuation. She indicated that the Government hoped to introduce relevant legislation by the end of this year.
This paper focuses on access to superannuation for victims of crime compensation. Broader issues relating to early release on compassionate and severe financial hardship grounds will be progressed through a separate process.
The purpose of this paper is to consult on two draft proposals that would provide victims of crime with access to a perpetrator’s superannuation in certain circumstances. Responses to the paper will inform the development of legislation on this issue. The first draft proposal aims to prevent criminals from using superannuation to shield assets from victims of crime. It would allow victims of crime to claw back ‘out of character’ contributions. This would be achieved by amending the current early release provisions to require trustees to pay amounts into court in response to a claw-back order (either directly to court or through some mechanism to centralise and streamline release and payment). The first draft proposal would only apply to particular contributions rather than the perpetrator’s entire superannuation balance.
The second draft proposal would allow victims of serious crimes with unpaid compensation orders to access a perpetrator’s entire superannuation balance (not just particular contributions) where other assets have been exhausted. This draft proposal is based on the principle that the interests of uncompensated or partially compensated victims of crime should be prioritised over the retirement income needs of the perpetrator. This draft proposal also includes safeguards to protect the interests of dependants of a perpetrator.
The States and Territories will play an important role in ensuring the draft proposals can work within their current legislative and administrative frameworks for compensating victims of crime. It is important that any legal complexities, including in the interactions of Commonwealth and state and territory laws and procedures, do not undermine the principle of ensuring superannuation is available for compensating victims of crime in appropriate circumstances.
The Review seeks stakeholder feedback on the two draft proposals by 15 June 2018.