Nola Marino (Forrest, Liberal Party) Share this | Hansard source

I rise to speak on the Superannuation Legislation Amendment (Early Release of Superannuation) Bill 2011. In the current economic times, the value of people's superannuation is a constant conversation in workplaces, around dinner tables and at social gatherings throughout Australia. People are very concerned. For many people the only exposure they have to the share market is through their superannuation fund, while others have both private investment and superannuation in stocks and bonds. That is part of the reason the current market volatility is being watched—specifically by those who are close to or at the point of retirement—so closely around the country and why the calculators are out, with people trying to work out the impact on individual accounts and the amount they have available to them. In fact, Australians are extremely concerned about exactly what their superannuation will be worth when they need it.

In the past few years, all forms of financial advisers and accountants have constantly dealt with concerned clients and new clients—people who, for the first time, are taking a direct interest in their superannuation. It is in this environment we find ourselves discussing superannuation legislation in the bill before the House. As we know, the bill amends the Retirement Savings Accounts Act 1997 and the Superannuation Industry (Supervision) Act 1993 to facilitate the transfer of the administration of the early release of superannuation on compassionate grounds from the Australian Prudential Regulation Authority to the Chief Executive of Medicare. Generally, as we know, superannuation cannot be accessed before you are at least 55 years old. That is so that Australians can fund themselves in retirement. However, in some very specific circumstances, the law allows the early release of benefits that are held in a retirement savings account or superannuation benefits in an APRA regulated entity.

Also, the bill transfers the general administration of the early release of superannuation benefits in self-managed super funds on compassionate grounds from the Commissioner of Taxation to the Chief Executive of Medicare. In most circumstances, these benefits are taxed. Even though the government gives permission to access superannuation early, the super fund trustee does not have to release those benefits to the individual concerned. The superannuation fund trustee or RSA provider decides what benefits they will and will not release and may charge fees for the early release of the funds. This is a concern to some of my constituents. Several of my constituents have needed to access part or all of their preserved benefits and savings prior to actual retirement for a range of compassionate reasons covered by this bill. It is never an easy decision. It is often a decision of last resort, according to the circumstances that people find themselves in. Generally, a constituent and their spouse, partner or dependent children are in extreme distress and under a great deal of personal as well as financial pressure when they have to make this decision. They may be suffering from a medical problem. It may be a life-threatening illness or an injury. They may be desperate for the funds to alleviate acute or chronic physical pain or be suffering from acute or chronic mental conditions, and that makes this process quite difficult. They may need it to pay for medical transport, which is really a major issue in regional and rural areas such as those in my electorate. It is a critical issue, made worse for people who live in very small communities, in isolated areas or on isolated properties. They might live in a very small community or on an isolated rural lot, and they will have to deal with this issue of medical transport. Increasingly we are finding that there are people who may not have relatives or friends to assist them at that time, so the issue of medical transport in regional areas is a very important one to the people affected.

Most of these circumstances, for people who find themselves in this position, are totally unexpected. It is a real shock for the person affected and for their whole family. It is always extremely difficult to manage and, of course, you do not really plan for this—you do not expect it to happen. It depends entirely on each person's individual circumstances as to what they are facing and what their financial situation is. It is for these sorts of reasons that some people need to access their retirement savings to prevent mortgagees from selling their homes, for example, because of overdue loan repayments, something I have certainly seen an increase of in recent years.

The early release of superannuation funds and retirement savings can also occur on compassionate grounds to fund the funeral expenses or palliative care that often follow the instances I mentioned previously. If a person or one of their dependants is severely disabled, he or she can apply to access their superannuation or retirement funds if this disability requires their home or car to be modified because of the disability. For those who have lost their jobs or who are in extremely difficult financial situations—and I would think many members in this House would, like me, have dealt with people who have found themselves in that position in recent times—it can be a difficult situation and they may also be able to access a portion of their benefits, subject to certain conditions. This can be that they have been receiving Commonwealth income support, such as unemployment benefits, for at least 26 continuous weeks and the trustee of their super fund is satisfied that the person cannot meet their immediate family expenses. This adds to the pressure that the individual finds themselves under. A payment is for the purposes of meeting everyday living expenses and can be one payment of no more than $10,000, including tax, in any 12-month period. The other condition is that when the person has reached their preservation age they may be able to receive their entire superannuation benefit, provided that they have received government income support for at least 39 weeks.

It is reasonable to suggest that a body that understands income support, such as Medicare, would be able to judge the compassionate needs of superannuants in the situations that I have mentioned throughout my speech. As such, the move to make the Chief Executive Officer of Medicare responsible for the administration of the early release of superannuation is understandable. Given that this has been in effect under a delegation agreement since February this year, this bill will simply formalise existing functions. The transfer of fees collected as a levy to manage this administration will be progressed, but again, as the member for Forde and the member for Paterson said, we do not have information as to whether these fees will be sufficient to allow the administration that is required to be conducted efficiently by Medicare in this instance.

Many members will, like me, have been approached by constituents who have only limited superannuation as they approach retirement. We know that over the last 10 years the top-performing superannuation products are returning on average around five per cent. Many people who are now close to retirement are focusing particularly on the amount that is in their superannuation funds. There are those who have seen the value of those superannuation funds diminish. It has caused a number of people to investigate how they could make these funds more secure, because the volatility of the market has seen the value of those superannuation funds erode.

My office would be similar to many others, with a number of constituents looking at where their funds are currently invested, how they are invested, what they are worth, what the changes to them are and how those changes are going to impact those people. It is a particularly relevant issue for people who are facing retirement in the immediate sense. The value of these superannuation funds is particularly critical to them. On that basis, Madam Deputy Speaker, I thank you for your time.

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