Summary

19.1 In this chapter the ALRC examines ways in which the Australian superannuation system does, or could, respond to protect those people experiencing family violence. In doing so, the ALRC acknowledges the specific role superannuation plays as a long-term form of savings and recognises the policy tension between the need to preserve superannuation benefits until retirement and the need, in limited circumstances, to allow early access to superannuation funds.

19.2 The chapter consist of two main parts. The first part deals with circumstances in which a victim of family violence may have been coerced into taking action in respect of their superannuation. It considers superannuation agreements, spousal contributions and self-managed superannuation funds (SMSFs). The ALRC concludes that the treatment of superannuation should be considered in the context of an inquiry into how family violence should be dealt with in respect of property proceedings under the Family Law Act 1975 (Cth) and considers changes to the regulation of, and guidance material with respect to, SMSFs.

19.3 The second part of the chapter examines circumstances in which a victim of family violence may wish to seek early access to superannuation benefits for the purposes of, for example, leaving a violent relationship. In considering early release on the basis of severe financial hardship, the ALRC proposes amendments to the eligibility requirements for making an application and to guidance material for decision makers in granting early release. The ALRC also considers whether compassionate grounds could be amended to account for family violence, or whether a new ground of early release on the basis of family violence should be introduced. The part also outlines a range of other issues relevant to early release, including in relation to application forms, training, applicant safety measures, time limits and data collection and systems integrity measures.

Terminology

19.4 As outlined in Chapter 2, the concept of safety in the course of this Inquiry is a broadly constructed one, and as a result, for the purposes of this chapter safety primarily refers to the safety arising from economic security and independence.

19.5 Family violence in this context is defined according to the definition recommended in Proposal 3–2, which the ALRC suggests should be inserted into the Superannuation Industry (Supervision) Regulations 1994 and, where appropriate, in all Australian Prudential Regulation Authority, Australian Taxation Office and superannuation trustee material.

Matters outside this Inquiry

19.6 As outlined in Chapter 1, detailed consideration of, or proposals with respect to amending, the Family Law Act 1975 (Cth) is beyond the Terms of Reference for this Inquiry.^[1] To a certain extent, some of the issues raised in relation to superannuation and family violence were addressed in Family Violence—A National Legal Response (ALRC Report 114). Accordingly, where appropriate the ALRC refers to recommendations made in Family Violence—A National Legal Response.

19.7 There are also a number of systemic matters which have arisen in the course of the Inquiry which the ALRC considers are beyond the Terms of Reference. These primarily relate to early access to superannuation and include whether:

• the administration of all claims for early release of superannuation benefits should be the responsibility of one agency;

• the current monetary limits on the amount of superannuation able to be released early are appropriate; and

• one external review body or mechanism should be established to review decisions on early release of superannuation applications.

19.8 Many of these issues were considered in 2002 by the Senate Select Committee on Superannuation and Financial Services.^[2]

19.9 In addition, in 2009, the Australian Government commissioned a review into the governance, efficiency, structure and operation of Australia’s superannuation system. The final report by the Super System Review Panel was released on 5 July 2010. The Government’s response to the Review, Stronger Super, introduced a range of reforms to the superannuation system including MySuper and SuperStream.^[3] The reforms introduced as part of Stronger Super are wide-ranging, but few appear to respond to, or account for circumstances involving family violence. Accordingly, these reforms will not be considered in the course of this Inquiry, other than with respect to data collection issues outlined towards the end of this chapter.