Proposed changes put forward by the federal government to prevent convicted child sexual abusers from hiding their assets in superannuation in order to avoid paying compensation to victims and survivors have received in-principle support from a group of professional bodies.
But the group — made up of the Financial Planning Association (FPA), the SMSF Association, Chartered Accountants Australia and New Zealand (CA ANZ), CPA Australia, and the Institute of Public Accountants (IPA) — has suggested that the scope of the proposed policy should be broadened to include victims and survivors of other heinous crimes.
In their submission to the government’s consultation, which closed on 16 February, the associations indicated that they “appreciate the rationale” for permitting the early release of super for child sexual abuse crimes.
“However, it is our belief that once this policy is implemented and commenced, victims and survivors of other crimes will also seek access to an offender’s superannuation savings for unpaid compensation orders,” they said.
“We therefore believe that this policy should be extended to all serious indictable offences which we define as criminal trials involving a judge and jury and serious offences that an accused can elect to have heard by judge alone.”
The associations noted that how offences committed in overseas jurisdictions are treated need to be considered. Additionally, they suggested that the Treasury consult with legal experts to clarify the circumstances under which civil compensation can be paid out from superannuation benefits.
According to the group, superannuation monies should only become available to victims and survivors when the time period to allow an appeal to a higher court has lapsed.
“Otherwise, there is a risk of an appeal exonerating the accused after some of their superannuation contributions had been paid to victims,” they said.
Legislation should also cater for the rare possibility of a conviction being overturned, the associations said, “perhaps by way of a ministerial discretion to make an ex-gratia payment” that would restore the accused to the financial position had their super not been dissipated.
In terms of what types of super contributions should be covered, the professional bodies proposed that it should apply to “out of character” contributions only.
“We suggest that all personal contributions, including those that are claimed as a tax deduction and salary sacrifice contributions that do not fit the offender’s normal contribution pattern,” the group explained.
“Contributions made for a spouse and contributions split with a spouse should also be considered, as should unclaimed superannuation monies held by the Australian Taxation Office.”
The professional bodies also specifically called attention to a part of the Treasury discussion paper released in January, which said: “In recent years, there have been a number of high-profile reports of convicted child sexual abuse offenders deliberately hiding millions of dollars’ worth of assets in superannuation accounts to defeat compensation claims.”
While acknowledging that there are a “small number” of individuals with very large super balances, the group said that this number is expected to fall due to contribution caps introduced in 2007 and total super balance restrictions on contributions introduced in 2017.
“As a consequence, we believe that attempts to contribute large amounts into an offender’s superannuation account will also fall,” they said.
“However, an overriding objective with any change made in this area must be to avoid the old legal maxim that ‘hard cases make bad laws’.”
The group agreed on the importance of integrating any new arrangements with existing legal frameworks, specifically bankruptcy laws and proceedings, family law and proceedings, and the federal and state or Territory proceeds of crime regimes.
“Existing systems presently in use, for example health, social security ,and other assistance, must still be able to be relied upon,” the professional bodies added.
“The situation whereby superannuation becomes a first resort risks disadvantaging victims and survivors where an offender has no superannuation interests.”
Jon Bragg
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
