Welcome to the latest issue of the KHQ Super Alert. It has been a quieter week in the industry this week. The main noteworthy news item relates to APRA’s release of new frequently asked questions for its superannuation data transformation project.
Parliament – Bill for SCT closure
On 28 October 2020, the TrSeasury Laws Amendment (2020 Measures No. 4) Bill 2020 was introduced into the House of Representatives.
The Bill proposes to amend the Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Act 2018 ‘to facilitate the closure and any transitional arrangements associated with AFCA replacing the SCT’. The Bill ‘provides for the transfer of records and documents from the SCT to ASIC, the remittal of matters on appeal by the Federal Court, and introduces a rule-making power to allow the Minister to prescribe other matters of a transitional nature’.
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APRA – FAQs for data transformation project
On 27 October 2020, APRA published a new set of frequently asked questions for its superannuation data transformation project, as well as several worked examples. A number of questions relate to reporting fees and costs to APRA during the transition to the new fees and costs disclosure rules.
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APRA – Senate Economics Legislation Committee speech
On 27 October 2020, APRA published the opening statement made by its chair, Wayne Byres, to the Senate Economics Legislation Committee in which he gave an update on APRA’s activities since March 2020. He stated that although ‘APRA had a wide-ranging and ambitious agenda for 2019/20 and beyond’ the onset of COVID-19 ‘meant that there had to be a rapid reassessment of those priorities, and a redeployment of resources to focus on the core operational and financial resilience of the sector’.
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AAT – Decision in relation to excess non-concessional contribution determination
On 23 October 2020, the Administrative Appeals Tribunal handed down its decision in Purcell and Commissioner of Taxation [2020] AATA 4235. The matter concerned an excess non-concessional contributions determination made by the ATO to a member who had made a $4,000 contribution in excess of the non-concessional contribution cap. In accordance with sections 97-25 and 97-30 of Schedule 1 to the Taxation Administration Act 1953 (Cth), the ATO also assigned $517.65 worth of ‘associated earnings’ to that amount, so that a total of $4,517.65 was required to be released from the member’s account.
The member argued that the imposition of the ‘associated earnings’ was a penalty because it was so high (set at 8.73% for the financial year in question). The member claimed that the ATO could waive this additional amount. The Tribunal disagreed and found that the ATO ‘has no discretion’ and it is ‘obliged [by the legislation] to make the written determination and…obliged to apply the formula in s 97-30 in calculating associated earnings’.
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