Legal Practice

Treasury Laws Amendment (Putting Consumers First Establishment of the Australian Financial Complaints Authority) Bill 2017

This submission has been prepared by the Law Council of Australia's Superannuation Committee, Legal Practice Section. 

The Committee's objectives are to ensure that the law relating to superannuation in Australia is sound, equitable and clear. The Committee makes submissions and provides comments on the legal aspects of most proposed legislation, circulars, policy papers and other regulatory instruments which affect superannuation funds.

The Government has introduced the Treasury Laws Amendment (Putting Consumers First – Establishment of the Australian Financial Complaints Authority) Bill 2017 (the Bill) to implement a new framework for dispute resolution in the financial system under which the Australian Financial Complaints Authority (AFCA) will deal with all financial disputes, including superannuation disputes.

The Committee’s response to the Bill is guided by our objectives as identified above. The Committee had previously provided a submission to Treasury on exposure drafts of the Bill and is pleased to note that many of its comments were taken into account in preparing the Bill that has been introduced to Parliament.

The Committee has four main residual concerns with the Bill:

1. The Bill does not include statutory time limits within which complaints about disability benefits can be made, as recommended Final Report of the Review of the financial system external dispute resolution and complaints framework (the Ramsay Report). These time limits are critical to the effective review of trustee decisions about superannuation disability benefits because they recognise the essential nexus between entitlement to such a benefit and the cessation of employment due to disability;

2. The Bill does not include a jurisdictional exclusion for complaints about the management of the fund, as recommended by the Ramsay Report;

3. The Bill excludes ‘jurisdictional’ decisions that AFCA may make about whether or not to accept a complaint from judicial review by the Federal Court under the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act). This reduces consumer rights.

4. In attempting to replicate the claim staking provisions of the Superannuation (Resolution of Complaints) Act 1994 (Cth) (SRC Act) as recommended by the Ramsay report, subtle changes in wording have made them less certain, which may provide less confidence for trustees to pay out death benefits in a timely manner (as was intended). The Committee also notes some technical drafting issues and the omissions of powers that may be useful for AFCA to have in a superannuation context. In addition, the Committee raise an issue relating to the status of trustee decisions pending review.

The Committee also notes some technical drafting issues and the omissions of powers that may be useful for AFCA to have in a superannuation context. In addition, the Committee raise an issue relating to the status of trustee decisions pending review.

You can read the full submission below.

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