“It will be reasonable for RSE [superannuation fund] licensees to depart from their usual fraud control measures in order to ensure payments are made to members as soon as practicable” under the Government’s new hardship early access to superannuation regime, according to the Australian Prudential Regulation Authority (APRA).
While superannuation funds will still have to play a role in verifying the legitimacy of early release superannuation under the Government’s COVID-19 arrangements, APRA has conceded that the fact most of the work will be done by the Australian Taxation Office (ATO) meaning they will have less visibility over what is happening.
APRA has confirmed that funds will still need to act on any red flags they detect but has added that, provided the funds can prove they have followed all the relevant procedures, it is “unlikely” the regulator would take any action against where fraud occurs.
In an updated question and answer exercise around the changed arrangements, APRA said that it acknowledged that the process for determining and paying amounts under the COVID-19 early release of super measures was different to the usual process for making payments under existing early release grounds.
“The AML/CTF Rule exempting RSE licensees from undertaking up-front customer verification means that RSE licensees will, in most cases, have less RSE licensee-verified information upon which to form a view about a payment,” it said.
“However, the security controls around the application process and the RSE [superannuation fund] licensee appropriately acting on red flags identified by their automated checking process will mean that for the majority of applications it will be reasonable for RSE licensees to depart from their usual fraud control measures in order to ensure payments are made to members as soon as practicable.
“In circumstances where an RSE licensee is able to satisfactorily demonstrate to APRA that it has followed the approach set out in these FAQs, APRA would be unlikely to take action against an RSE licensee should a fraudulent payment/s occur.”