19 Nov 2020 Legislation
The Social Services and Other Legislation Amendment (Extension of Coronavirus Support) Bill 2020 was introduced into the House of Representatives on 12 November 2020. This is a Bill for an Act to amend the law relating to social security, veterans’ entitlements and farm household support, and for related purposes
This will enact the extension of the temporary Coronavirus supplement from 1 January 2021 to 31 March 2021.
More information here.
Banking Royal Commission: Bills to implement further recommendations
Two bills were introduced into the House of Representatives on 12 November 2020, both relating to the Banking Royal Commission. These bills are the Corporations (Fees) Amendment (Hayne Royal Commission Response) Bill 2020 and the Financial Sector Reform (Hayne Royal Commission Response) Bill 2020.
The Government has introduced a package of legislation into the Parliament addressing 20 recommendations and one additional commitment from the Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
According to the Treasury, the reforms being introduced will:
- Strengthen the unsolicited selling (anti-hawking) provisions, including for superannuation and insurance products;
- Introduce a deferred sales model for add-on insurance products, to prevent inappropriate sales of add-on insurance;
- Make the handling and settlement of insurance claims a ‘financial service’, which will require insurers to behave honestly and comply with licensing obligations;
- Prohibit the trustee of a superannuation fund from having a duty to act in the interests of another person, other than those arising from their duties as trustee of a superannuation fund;
- Allow provisions in financial services industry codes to be enforceable, with breaches attracting civil penalties; and
- Ensure better adherence by industry and certainty for consumers.
Read more here.
On 12 November 2020 the Financial Sector Reform (Hayne Royal Commission Response) Bill 2020 was introduced to the House of Representatives. This has 20 recommendations and one additional commitment from the Banking Royal Commission.
The superannuation changes are as follows:
- APRA and ASIC's roles in superannuation: This Bill will make adjustments to the SIS Act relating to the roles and responsibilities of the superannuation industry regulators. This Bill will extend ASIC's role in superannuation regulation to cover consumer protection and market integrity regulation. Date of effect will be the later of the day after assent to the Bill and 1 January 2021.
- "Superannuation trustee service" to be a financial service: The Australian financial services (AFS) licensing regime will also be extended to cover a broader range of activities undertaken by APRA-regulated superannuation trustees. This seeks to more effectively make ASIC the superannuation regulator responsible for promoting consumer protection and market integrity.
- Trustee indemnity changes: The Bill will amend the trustee indemnification rules in ss 56 and 57 of the SIS Act to prevent superannuation trustees (and their directors) from using trust assets to pay criminal, civil or administrative penalties incurred in relation to a contravention of any Commonwealth law in circumstances where the breach did not previously warrant disentitlement based on the existing principles in s 56. Date of effect will occur when an application provision will clarify that these trustee indemnity amendments will apply in relation to liabilities imposed on or after the commencement of the amendments.
- Superannuation trustees should have no other duty: The SIS Act will be amended to impose a new condition on licences held by a body corporate trustee of a registrable superannuation entity (recommendation 3.1). The new licence condition will prohibit these trustees from having a duty to act in the interests of another person, subject to exceptions that enable trustees to carry out their ordinary functions as a trustee of a registrable superannuation entity (RSE). Date of effect will be the later of the day after assent to the Bill and 1 July 2021.
COVID-19 Supplement extension to 31 December 2020: Instrument registered
On 12 November 2020 The Social Security (Coronavirus Economic Response—2020 Measures No. 15) Determination 2020 was registered by the Minister for Families and Social Services Anne Ruston.
- Extends the COVID-19 supplement so that it will be continued to be paid at the rate of $250 per fortnight for social security instalment periods that begin on a day during the period from 19 December 2020 to 31 December 2020 (inclusive); and
- Amends the Social Security (Coronavirus Economic Response — 2020 Measures No 11) Determination 2020 to extend the end date of the employment income nil rate period to 31 December 2020. This will ensure that increased partner income from JobKeeper does not result in the loss of certain social security benefits.
Date of effect 17 December 2020.
Read more here.
On 17 November 2020 the government released the Insolvency reforms to support small business – subordinate legislation.
According to The Treasury, the Government has introduced legislation into the Parliament to progress the insolvency reforms that were announced on 24 September 2020. The reforms will reposition the insolvency system to help more small businesses restructure and survive the economic impact of COVID-19.
The changes are set to introduce new processes suitable for small businesses, reducing complexity, time and costs for small businesses. The changes will enable more Australian small businesses to quickly restructure. Where restructure is not possible, businesses will be able to wind up faster, enabling greater returns for creditors and employees.
The changes include:
- A new debt restructuring process for incorporated businesses with liabilities of less than $1 million.
- Simplified liquidation pathways to allow faster and lower-cost liquidation.
- Complementary measures to ensure the insolvency sector can effectively respond to increased demand and the needs of small businesses.
Following the passage of legislation through the Parliament, these new insolvency processes will be available for small businesses from 1 January 2021.
Submissions are due 24 November 2020.
For more information and where to respond click here.
The Economic Recovery Package (JobMaker Hiring Credit) Amendment Bill 2020 received Royal Assent as Act No 96. of 2020 on 13 November 2020.
The Bill amends the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 to allow the Treasurer to make rules to provide for a COVID-19 economic response payment in relation to the JobMaker Hiring Credit scheme, which will operate from 7 October 2020 to 6 October 2022.
Read more here.