Changes to ECPI and visibility of super assets before Parliament

The bill includes one of the two proposed measures affecting ECPI amending the requirement for actuarial certificates for certain superannuation funds. The bill amends the ITAA 1997 to remove the requirement for superannuation trustees to provide an actuarial certificate when calculating exempt current pension income using the proportionate method, where all members of the fund are fully in retirement phase for all of the income year.

“This measure delivers on a 2019–20 budget commitment to reduce costs and simplify reporting for superannuation funds by streamlining some administrative requirements for the calculation of exempt current pension income,” Assistant Treasurer Michael Sukkar said.

“This is achieved by permitting affected funds to use the segregated method to calculate exempt current pension income.”

Meanwhile, the bill also introduces a new mechanism for the sharing of superannuation information for family law proceedings.

The bill amends the Taxation Administration Act and the Family Law Act to create a new mechanism for sharing superannuation information for family law proceedings. The Registries of the Federal Circuit and Family Court of Australia and the Family Court of Western Australia will serve as an intermediary in the information-sharing process.

The Registries may request superannuation information of a party to permitted family law proceedings from the commissioner on application of the other party to the proceedings.

The commissioner may also disclose superannuation information to the requesting Registry to provide to the parties and their lawyers. All disclosures and on-disclosures of the superannuation information must be for the purpose of permitted family law proceedings.

The amendments will make it harder for parties to hide or under-disclose their superannuation assets in family law proceedings by reducing the time, cost and complexity for parties seeking information about their current or former spouse/de facto partner’s superannuation. 

Furthermore, a party will be able to use information from the commissioner to seek up-to-date superannuation information from the other party’s superannuation fund, limiting the need to rely on subpoenas or court orders to obtain this information.

“Where one party is not forthcoming with their superannuation assets during these proceedings, at present it can be complex, costly and time-consuming for the other party to access this information,” Mr Sukkar added.

“This schedule amends the Family Law Act 1975 and the Taxation Administration Act 1953 to allow parties to family law proceedings in the Federal Circuit and Family Court, and the Family Court of Western Australia, to apply to the Family Court Registries to request information from the Australian Taxation Office (ATO) that will assist them to identify their former partner’s superannuation interests.

“By supporting more just and equitable division of property, these amendments will help alleviate the financial hardship and negative impact on retirement incomes from separation.”