Leading law firm Minter Ellison has taken issue with the key elements of a Federal Government white paper dealing with the treatment of superannuation in bankruptcy.
In an analysis of the Government’s proposals issued this week, Minter Ellison partner, Richard Batten argues that “the proposals in the consultation paper are not justified by any evidence that superannuation is being used to avoid creditors”.
He said this was hardly surprising in circumstances given the severe tax penalties and bankruptcy consequences if benefits exceed the retirement benefits limit.
“Consequently, it is hard to understand why the current simple exemption for superannuation should be replaced with a much more limited exemption that will increase administrative costs for superannuation trustees and therefore reduce member benefits,” Batten argues.
The Minter Ellison analysis points to a number of problems for superannuation fund trustees evolving from the white paper recommendations including being required to pay superannuation fund monies in relation to a cashing order.
Batten said that the white paper appeared to suggest that the cashing notice was mandatory without a court order, raising questions about when a superannuation trustee should resist a cashing notice.
