Superannuation funds should not be held accountable for member breaches resulting from the Government’s home downsizer Budget measure, according to the Association of Superannuation Funds of Australia (ASFA).
ASFA has used its submission to the Treasury responding to the legislative proposals intended to underpin the Budget measures to state that its members had “expressed a strong concern” about elements of the legislation which would see super funds held responsible for breaches by members utilising the downsizing regime.
The draft legislation states that it is “expected that if an APRA-regulated superannuation provider is aware that a downsizer contribution that it received does not meet the definition of a downsizer contribution in section 292-102, it must report this as a serious breach on its breach register”.
The ASFA submission stated: “Superannuation providers feel strongly that – as this would not represent a breach on the part of the fund itself, but instead would represent a breach of the regulatory requirements by the member - funds should not be liable to record this as a breach”.
The submission pointed out that a superannuation fund did not have access to the necessary information to determine the eligibility of the contribution and, accordingly, was only in a position to accept a contribution on the basis of a member’s self-assessment/declaration.
“Provided the member has used the approved form the fund should not be held accountable/responsible for any error, omission or deception on the part of the member and it should not be considered to be a breach by the fund,” the ASFA submission said.