Retirement Savings Accounts Regulations (Amendment) (Cth)

Statutory Rules 1997No. 150 1

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Retirement Savings Accounts Regulations2 (Amendment)

I, The Governor-General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following Regulations under the Retirement Savings Accounts

Act 1997.

Dated 25 June 1997.

 WILLIAM DEANE

 Governor-General

By His Excellency’s Command,

C. R. KEMP

Assistant Treasurer

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1.   Commencement

1.1   These Regulations commence on 1 July 1997.

2.   Amendment

2.1   The Retirement Savings Accounts Regulations are amended as set out in these Regulations.

3.   Regulation 4.01 (Interpretation)

3.1   Subregulation 4.01 (2) (definition of “condition of release”):

Omit the definition, substitute:

“‘Commonwealth income support payment’ means:

• (a)

  an income support supplement; or

• (b)

  a service pension; or

• (c)

  a social security benefit; or

• (d)

  a social security pension;

as defined in section 23 of the Social Security Act 1991;

‘compassionate ground’, in relation to the release of an RSA holder’s preserved benefits or restricted non-preserved benefits in an RSA, means a ground listed in subregulation 4.22A (1);

‘condition of release’ means a condition of release specified in column 2 of Schedule 2;”. 

3.2   Subregulation 4.01 (5):

Omit the subregulation, substitute:

 “(5) For the purposes of Schedule 2, a person is taken to be in severe financial hardship if:

• (a)

  the person is aged less than 55 years and 39 weeks and the RSA provider is satisfied, based on written evidence provided by at least one Commonwealth department or agency responsible for administering a class of Commonwealth income support payments, that:

  • (i)

    the person has received Commonwealth income support payments for a continuous period of 52 weeks; and

  • (ii)

    the person was in receipt of payments of that kind on the date of the written evidence; or

• (b)

  the person is aged 55 years and 39 weeks, or more, and the RSA provider is satisfied:

  • (i)

    based on written evidence provided by at least one Commonwealth department or agency responsible for administering a class of Commonwealth income support payments—that the person received Commonwealth income support payments for a cumulative period of 39 weeks after the person turned 55 years of age; and

  • (ii)

    that the person was not gainfully employed on a full-time, or part-time, basis on the date of the application for cashing of his or her preserved benefits, or restricted non-preserved benefits, in the RSA.

 “(5A)The written evidence provided for by paragraph (5) (a) is of no effect if it is dated more than 21 days before the date of the person’s application to the RSA provider for cashing of his or her preserved benefits or restricted non-preserved benefits.

 “(5B) For the purposes of Schedule 2, an RSA holder is taken to have satisfied a condition of release if the event specified in that condition has occurred in relation to the RSA holder.”. 

4.   New regulation 4.22A

4.1   After regulation 4.22, insert:

Release of benefits on compassionate grounds

 “4.22A.(1)A person may apply to the Commissioner for a determination that an amount of the person’s preserved benefits, or restricted non-preserved benefits, in an RSA may be released on the ground that it is required: 

• (a)

  to pay for medical treatment or medical transport for the person or a dependant; or

• (b)

  to enable the person to make a payment on a loan, to prevent:

  • (i)

    foreclosure of a mortgage on the person’s principal place of residence; or

  • (ii)

    exercise by the mortgagee of an express, or statutory, power of sale over the person’s principal place of residence; or

• (c)

  to modify the person’s principal place of residence, or vehicle, to accommodate the special needs of the person, or a dependant, arising from severe disability; or

• (d)

  to pay for expenses associated with the person’s palliative care, in the case of impending death; or

• (e)

  to pay for expenses associated with a dependant’s:

  • (i)

    palliative care, in the case of impending death; or

  • (ii)

    death; or

  • (iii)

    funeral; or

  • (iv)

    burial.

 “(2) The Commissioner must determine, in writing, that the person has satisfied, for the purposes of subregulation 4.21 (1) or 4.22 (1), a condition of release on a compassionate ground if the Commissioner is satisfied that:

• (a)

  the release is required on a ground mentioned in subregulation (1); and

• (b)

  the person does not have the financial capacity to meet an expense arising from that ground. 

 “(3) The Commissioner cannot be satisfied that the money is required for medical treatment unless 2 registered medical practitioners (at least one of whom must be a specialist) certify that:

• (a)

  the medical treatment is necessary to:

  • (i)

    treat a life threatening illness or injury; or

  • (ii)

    alleviate acute, or chronic, pain; or

  • (iii)

    alleviate an acute, or chronic, mental disturbance; and

• (b)

  the treatment is not readily available to the person, or the dependant, through the public health system.

 “(4) The Commissioner cannot be satisfied that the money is required for medical transport unless the medical treatment for which the medical transport is required has been certified, under subregulation (3), as necessary for a reason mentioned in paragraph (3) (a). 

 “(5) The Commissioner cannot be satisfied that the money is required on the ground mentioned in paragraph (1) (b) unless the person gives to the Commissioner a written statement from the mortgagee that:

• (a)

  payment of an amount is overdue; and

• (b)

  if the person fails to pay the amount, the mortgagee will:

  • (i)

    foreclose the mortgage on the person’s principal place of residence; or

  • (ii)

    exercise its express, or statutory, power of sale over the person’s principal place of residence.

 “(6) A statement under subregulation (5) must include the following information:

• (a)

  the amount that is equal to 3 months’ repayments under the mortgage; and

• (b)

  the amount that is 12 months’ interest on the outstanding balance of the loan at the time the statement is made. 

 “(7) In this regulation:

‘medical transport’ means transport, for medical attention, by land, water or air.”. 

5.   Schedule 2 (Conditions of release and cashing restrictions—preserved benefits and restricted non-preserved benefits)

5.1   Item 105:

Omit the item, substitute:

“105	Severe financial hardship	For a person taken to be in severe financial hardship under paragraph 4.01 (5) (a)—in each 12 month period (beginning on the date of first payment), a single lump sum not less than $1,000 (except if the amount of the person’s preserved benefits and restricted non-preserved benefits is less than that amount) and not more than $15,000
For a person taken to be in severe financial hardship under paragraph 4.01 (5) (b)—Nil”.

5.2   After item 108, insert:

“108A	Compassionate ground	A single lump sum, not exceeding an amount determined, in writing, by the Commissioner, being an amount that:
(a) taking account of the ground and of the person’s financial capacity, is reasonably required; and
(b) in the case of the ground mentioned in paragraph 4.22A (1) (b)—in each 12 month period (beginning on the date of first payment), does not exceed an amount equal to the sum of: (i) 3 months’ repayments; and (ii) 12 months’ interest on the outstanding balance of the loan”.

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NOTES

1. Notified in the Commonwealth of Australia Gazette on 26 June 1997.

2. Statutory Rules 1997 No. 116.