House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Deputy Prime Minister and Treasurer, the Hon Wayne Swan MP)

Chapter 5 Disclosure of superannuation information

Outline of chapter

5.1 Schedule 5 to this Bill includes a further exception to the secrecy provisions in Division 355 of Schedule 1 to the Taxation Administration Act 1953 (TAA 1953). This exception will allow the Australian Taxation Office (ATO) to disclose superannuation information to a regulated superannuation fund or public sector superannuation scheme, an approved deposit fund, retirement savings account (RSA) provider or their administrators (the bodies) for certain purposes.

5.2 This Schedule enables the ATO to provide the bodies with greater access to information that it holds on members' superannuation interests. This will allow funds to assist their members to find and consolidate their multiple and lost superannuation interests.

Context of amendments

5.3 In order to maintain privacy and confidentiality, the secrecy provisions in Australia's tax legislation impose strict obligations on taxation officers and others who receive taxpayer information not to disclosure this information.

5.4 Superannuation funds can currently access information from the lost member's register, Superannuation Holding Accounts Special Accounts and unclaimed superannuation guarantee amounts through the SuperMatch service. This information may be disclosed because of specific provisions within the relevant Acts that permit information to be provided to the bodies.

5.5 Funds using the SuperMatch service currently enter into an agreement with the ATO setting out the terms and conditions of their use of the service. Only the bodies with an agreement with the ATO can use SuperMatch.

5.6 Schedule 5 is part of a broader package of superannuation measures aimed at making it easier for superannuation funds and their members to locate and consolidate multiple and lost superannuation interests.

5.7 The ATO currently provides individuals with access to information on lost superannuation accounts, unclaimed money, superannuation guarantee amounts, and Superannuation Holding Accounts Special Accounts belonging to them that the ATO is aware of. This information is provided through the ATO's SuperSeeker service.

5.8 In addition, to their lost accounts and superannuation monies held by the ATO, individuals will be able to view their other superannuation accounts which are reported to the ATO on member contribution statements, through an enhanced ATO service.

5.9 Similarly, funds will not be limited to accessing information on lost accounts and amounts held by the ATO. Funds that have signed an agreement with the ATO will be able to use SuperMatch to obtain information about all their members' superannuation interests that are known to the ATO.

5.10 The new exception does not require the ATO to obtain the consent of a beneficiary, holder or applicant before disclosing protected information about that person to a superannuation entity.

5.11 However, the ATO's practice is that SuperMatch agreements entered into by superannuation funds with the ATO require superannuation funds to obtain a general consent from a member to access information using SuperMatch.

5.12 In addition, Regulation 6.49 of the Superannuation Industry (Supervision) Regulations 1994 and Regulation 4.46 of the Retirement Savings Accounts Regulations 1997 require fund trustees and RSA providers to obtain consent from a beneficiary or holder before using the beneficiary or holder's tax file number (TFN) to seek information from the ATO using facilities provided by the ATO (such as SuperMatch).

5.13 While the taxation laws include a number of provisions designed to ensure the security of TFNs (see Subdivision BA of Division 2 of Part III of the TAA 1953) the protection of TFNs does not form part of the framework. Therefore, TFNs will continue to be protected by the existing provisions in the taxation laws and through the legally binding guidelines on the use, disclosure and storage of TFNs that are issued by the Office of the Australian Information Commissioner.

5.14 In addition the ATO intends to reduce further the number of lost and multiple accounts by providing information to funds about their members' superannuation interests. This includes information to support auto-consolidation of low balance accounts.

5.15 To allow this the secrecy laws also need to be amended to allow the Commissioner of Taxation (Commissioner) to disclose information such as:

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information to enable a fund to fulfil their obligation to auto-consolidate accounts;

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information regarding other ATO-held monies, including, but not limited to, Superannuation Holding Account Special Account monies, Superannuation Guarantee amounts, Co-contributions and proposed Low Income Superannuation Contributions; and

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other information that would assist in reuniting individuals with their superannuation interests or for consolidating their superannuation interests, including, but not limited to, the provision of individuals' addresses.

Summary of new law

5.16 This Schedule enables the ATO to disclose information about an individual's superannuation interests to the bodies. This is achieved by a new exception to the secrecy provisions. [ Schedule 5, item 1, subsection 355-65(3) in Schedule 1 ]

5.17 The ATO is permitted to disclose information to the bodies where it is for the purpose of assisting a member to find all their superannuation interests so they can consider how they want to manage their superannuation interests. This includes whether they wish to:

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create a new superannuation interest with a superannuation provider and consolidate any or all of their existing superannuation interests into that new interest;

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consolidate existing interests; or

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maintain more than one superannuation interest with one or more RSA providers.

Comparison of key features of new law and current law

Detailed explanation of new law

5.18 A new exception to the secrecy provisions in subsection 355-65(3) of Schedule 1 to the TAA 1953 permits the ATO to disclose information held by the ATO about a member's superannuation interests to the bodies.

5.19 The record or disclosure can be made for the purpose of funds assisting a member to find their superannuation interests, including any amounts held by the ATO, so they can decided how they wish to manage their superannuation interests. This includes whether they wish to:

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create a new superannuation interest with a superannuation entity and consolidate any or all of their existing superannuation interests into that new interest;

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consolidate existing interests; or

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maintain more than one superannuation interest with one or more RSA providers.

5.20 The Office of the Australian Information Commissioner has been consulted on these amendments.

5.21 Disclosure of information may occur under the exception even where consolidation of interests is not available to the member, for example, because the member has only one superannuation interest in their current or any fund.

5.22 A member can use the information disclosed to decide whether to:

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consolidate any or all of their interests;

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transfer any of those interests;

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cash any of those interests; or

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in any other way manage their superannuation interests.

5.23 Information can also be disclosed to the bodies where the information relates to an individual who has applied to become a member of that superannuation entity.

Example 5.16

XYZ Fund requests information from the ATO in relation to Jack, a member of their superannuation fund, in order to assist Jack in consolidating superannuation interests from other funds with his current interest in XYZ Fund.

The secrecy provisions in Division 355 prohibit the ATO from releasing this data to XYZ Fund. However, the exception in subsection 355-65(3) allows the ATO to release this information to XYZ fund in order to assist the fund to help Jack manage his superannuation interests.

5.24 The record or disclosure will still be for such a purpose even if after the disclosure of the information, a member decides not to do any of those things with the information disclosed.

Example 5.17

ABC Fund requests data from the ATO in relation to Poppy, a member of their superannuation fund, as Poppy advised ABC Fund that she wished to consolidate her superannuation interests.

The ATO provides this information to ABC Fund. Later Poppy decides that she does not want to consolidate her superannuation interests.

The disclosure of information to ABC Fund was still authorised under the exception as it was provided to ABC Fund with the possibility of Poppy consolidating her superannuation interests.

Consequential amendments

5.25 This Schedule commences on Royal Assent.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Disclosure of superannuation information

5.26 This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview

5.27 This Schedule inserts a further exception in Division 355 of Schedule 1 to the TAA 1953. This will allow the ATO to disclose details of an individual's superannuation benefits, superannuation interests and other related information to superannuation entities, exempt public sector superannuation schemes, RSA providers and their administrators

Human rights implications

5.28 This Schedule does not engage any of the applicable rights or freedoms.

Conclusion

5.29 This Schedule is compatible with human rights as it does not raise any human rights issues.

Minister for and Superannuation, the Hon Bill Shorten