A proposal considered in a Treasury consultation paper to allow victims of violent crime access to the super of perpetrators, in limited circumstances, had the potential to be strongly positive, according to IOOF.
But while the financial services company advocates for broad and enhanced access to super, it warned the proposal would need careful consideration of the potential implications across all clients and how such access would operate in practice.
Existing provisions within the Superannuation Industry (Supervision) Regulations allow proceeds of crime, which have been funnelled into super, to be recovered by the states, however, judgment debts are not proceeds from a crime, rather part of the punishment for being found guilty of a crime.
“A middle ground may be to allow the victims’ compensation schemes – operated by state governments – to request a release of super on behalf of victims where a judgment debt remains unpaid,” IOOF technical services manager Josh Rundmann said today.
The compensation scheme would pay the judgment debt to the victim, then recover the cost from the convicted person’s super.
This removes any potential interactions between perpetrator and victim, and in the case of a wrongful conviction, the state, which is responsible for the prosecution of the crime, would also be better positioned to repay any amounts due to people who were incorrectly convicted, Rundmann said.
“Whilst not explicitly covered in the paper, victim support schemes provide valuable assistance in the immediate aftermath of a violent crime being committed against a person,” he noted.
“However, they are not able to cover all costs which may arise between the crime being committed and a criminal prosecution being completed.
“As such, introducing a third element to the hardship provisions to help victims of violent crime, which is not reliant on having received previous social security payments, should be considered.”
Under current processes, victims of violent crime generally have access to government-funded organisations that can provide assistance with the immediate recovery from a violent crime, such as repairs and emergency accommodation.
In addition to this, as part of the criminal justice process, if a perpetrator is found guilty of committing the crime, the judge may force the perpetrator to make a payment to the victim.
These payments are raised as judgment debts but super cannot normally be accessed to meet these types of debts.
The consultation paper examining the key issues relating to the early release of superannuation benefits due to severe financial hardship and compassionate grounds was published in December.
