Finance Finance News Financial regulator APRA given just 24 hours to advise on early super access

Financial regulator APRA given just 24 hours to advise on early super access

The government gave the financial regulator just 24 hours to offer advice on its early super access scheme. Photo: Getty/TND
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Australia’s financial regulator has revealed it was given less than 24 hours to provide advice on the first draft of the Morrison government’s early super access scheme.

Under intense grilling from Labor senator Kristina Keneally in a Senate committee hearing on Thursday, APRA deputy chair Helen Rowell admitted the government gave it a “same day” deadline to assess its proposal on March 18.

After one round of revisions, the government publicly announced the scheme just four days later – a rapid process that Senator Keneally characterised as being driven more by speed than compliance.

“We were given a very high-level verbal outline of what the features of the scheme were … [and] asked to give our view of the implications of the scheme from a superannuation system perspective,” Ms Rowell said of the government’s approach on March 18.

Only “internal discussions” took place, with little time to canvass opinions from super funds, the ATO or Treasury, she said.

When asked whether the government had informed APRA of future measures like JobKeeper before asking the regulator to provide advice on the early super access scheme, Ms Rowell said: “No.”

The government sent the regulator different parameters for the scheme “a couple of days later”.

Ms Rowell said the updated parameters did not, however, affect the regulator’s view of the scheme, which she did not disclose during the hearing.

When asked what changes the government made to its initial proposal, APRA boss Wayne Byers declined to say.

“Those are matters for the government,” he said.

On May 14, Industry Super Australia told the Standing Committee on Economics that the government had not consulted the superannuation industry before announcing its early access scheme.

Parliament approved the early super access scheme on March 23.

APRA’s most recent data shows 1.41 million early access applications have now been approved, with more than $10.6 billion paid out at an average amount of $7150.

Consumer groups previously warned young people mulling the scheme of the long-term ramifications, with more than half of all successful claims made by Australians under the age of 35.

Meanwhile, federal police have also revealed fraudsters may have pocketed hundreds of thousands of dollars from retrenched workers following a spate of unlawful superannuation withdrawals due to identity theft.

During questioning, Senator Keneally noted Assistant Superannuation Minister Jane Hume’s comments urging funds to pay out successful claimants as quickly as possible.

Senator Keneally asked whether the government’s push for speed came at the cost of compliance.

“It seems nobody has been rejected from this scheme … [and the rejections seen] largely relate to individuals who are attempting to submit multiple applications in the same financial year,” Senator Keneally said.

“That would be a liquidity concern. I’m just wondering did you raise any concerns with government about whether the scheme would be lawfully accessed?”

Ms Rowell responded: “The issue from our point of view was the number and dollars likely to be accessed and whether the assumptions around that were reasonable and able to be managed and therefore the volume of the payments from the system would be able to be managed by the super industry.”

APRA said after claim numbers soared in the first weeks after legislation passed parliament, new applications have now settled at roughly 200,000 per week.

The New Daily is owned by Industry Super Holdings