Govt called on for better fraud protections in super

The government should provide alternatives to the court system for clarifying that a superannuation interest has been reduced due to fraud or dishonesty, according to a tax and lobby group.

In a pre-budget submission, Tax & Super Australia said the transfer balance account rules provide that a debit will be made to a super member’s transfer balance account where a loss occurred due fraud or dishonesty.

However, one of the conditions for the debit to be made is that there must be a conviction of an offence involving fraud or dishonesty.

“A practical issue with this condition is that obtaining a judicial conviction for fraud or dishonesty will likely be extremely costly and time-consuming,” Tax & Super Australia said in the submission.

“We recommend that the government amends the law to provide an alternative mechanism to establish that a superannuation fund member or a class of members suffered a loss to their superannuation interests due to fraud or dishonesty.”

The submission said the government could amend the law to empower the ATO and APRA to make a determination that fraud or dishonesty occurred.

“The law may also be amended to empower suitable tribunals to make a decision that fraud or dishonesty occurred,” it said.

“Another option is to empower the relevant minister to make a determination that a particular class of members of the fund suffered a loss to their superannuation interests due to fraud or dishonesty.”

promoted stories

SUBSCRIBE TO THE SMSF ADVISER BULLETIN

Strategy