The federal government will introduce legislation that prevents convicted child sexual abusers from using superannuation as a method to protect assets to avoid paying compensation to abuse victims.
Assistant Treasurer and Financial Services Minister Stephen Jones said the government had released a consultation paper with two proposals that would allow for the release of an offender’s superannuation for the purposes of satisfying unpaid compensation orders.
The paper stated the current avenues through which a victim or survivor of abuse can seek compensation, which are state and territory compensation schemes, compensation orders handed down as a result of criminal proceedings or civil action against an offender, were unable to access superannuation.
Additionally, super fund trustees are unable to pay preserved benefits in these cases under Division 6.3 of the Superannuation Industry (Supervision) Regulations 1994.
“Consequently, offenders subject to criminal or civil proceedings relating to child sexual abuse, or those anticipating such proceedings, may be incentivised to voluntarily make large personal contributions to their or their spouse’s superannuation accounts to shield assets from potential compensation orders,” the paper stated, adding there have been a number of cases where this type of behaviour has occurred.
The first proposal would provide access for victims of abuse to any additional contributions made prior to criminal proceedings via a court-ordered early release mechanism facilitated by the ATO.
“By applying to the appropriate court, victims and survivors of child sexual abuse could be awarded an amount from their offender’s ‘additional’ contributions for the purposes of satisfying unpaid compensation orders,” the paper stated.
The second proposal would allow courts to access ATO data about an offender’s superannuation accounts so they can ascertain the value of the additional contributions made by an offender, and this data could be used to inform a victim’s or survivor’s decision to pursue further proceedings.
“These proposals will close a loophole that is causing further harm to victims by denying them court‑awarded compensation,” Jones said.
“Child abuse survivors and their advocates have long campaigned for these changes. The government will act quickly to close this loophole,” he added, noting the consultation will close on 16 February and the government would move quickly to introduce legislation into parliament.
