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Accounting bodies urge the government to widen its scheme beyond child sexual abuse survivors.
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Compensate victims of serious crime ‘with offender’s super’
21 February 2023
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Victims of serious crime should be compensated from the offender’s superannuation say a group of financial bodies, extending a government proposal for a scheme to pay child sexual abuse survivors.
CPA Australia, CA ANZ, Financial Planning Association (FPA), Institute of Public Accountants (IPA) and the SMSF Association have supported the government’s idea but say it fails to go far enough.
“We therefore believe that this policy should be extended to all serious indictable offences which we define as criminal trials involving a judge and jury and serious offences that an accused can elect to have heard by a judge alone,” said the joint submission.
“A serious offence in the NSW criminal code is defined as one involving a prison term of at least five years, we think this would be a good definition to use in these cases.”
The associations said access to superannuation should also be considered for those at civil trial, which demands a lower burden of proof.
“Civil action may occur because the higher evidentiary burden applicable in criminal proceedings cannot be satisfied based on legal advice from the outset or because of an adverse criminal court decision,” it said.
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“We recommend that Treasury obtain specialist legal input in this context to clearly clarify the range of circumstances where civil compensation could be met from superannuation benefits.”
The associations recommended access to the offender’s superannuation funds only become available once the period for an appeal to a higher court had lapsed to avoid instances of an appeal exonerating the accused after funds had been paid to the victims.
However, the bodies disagreed with the government’s proposal to exempt defined benefit (DB) super funds from the legislation.
“DB funds already have processes in place to manage family law splits which could be repurposed in these circumstances for the benefit of the victim,” it said.
The bodies said compensation claims on an offender’s super should be restricted to primary victims and secondary parties who were dependents of the primary victim.
“We believe that it is important to limit the scope for further disputation and appeal for an extended range of persons who may see financial opportunity, or who are seeking to resolve personal disputes about the allocation of compensation obtainable from superannuation balances,” the submission said.
“Accident insurers should be prohibited from claiming, directly or indirectly, against an at fault driver under these provisions.”
The associations also recommended against allowing the legislation to work retrospectively.
“A judge will have already determined the penalty for the offender on the basis of extant law and existing victim compensation processes,” it said.
“We support the approach of accessing superannuation balances based on unpaid compensation orders at the time any new laws come into effect.”
The bodies said the compensation should be handled by the ATO, victim payments should be tax-free and there should be no further tax liabilities for the offender’s superannuation.
The submission was signed by Tony Negline of CA ANZ, Richard Webb of CPA Australia, Tony Greco of the IPA, Ben Marshan of the Financial Planning Association, and Peter Burgess of the SMSF Association.
It comes as the government announced its proposal to legislate the objective for superannuation as “to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”.
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