International Law

ASIC has announced changes to hardship withdrawals from frozen mortgage funds. These changes expand the circumstances in which operators are able to make payments to fund members who demonstrate the need to access funds on hardship grounds.

The changes to the existing hardship relief provisions include:

1. The cap on hardship withdrawals for each member is raised to $100,000 each calendar year, from $20,000 plus 50 per cent of the member?s interest;

2. An investor can make up to four hardship withdrawals a calendar year, instead of a once-only withdrawal (subject to the overall cap of $100,000); and
3. Hardship grounds are extended:
(a) To cover a beneficiary of a deceased estate of a member where the beneficiary is suffering hardship; and
(b) To make it clear a person unemployed for at least three months without other means may apply for hardship relief.

ASIC's existing hardship relief (which continue in operation) applies where the member is able to satisfy the operator that they meet one of the following criteria:

1. Where the member is unable to meet reasonable and immediate family living expenses.
2. On compassionate grounds (e.g. medical costs for serious illness, funeral expenses or to prevent foreclosure); and
3. In the case of permanent incapacity.

Responsible entities of funds will need to apply to ASIC for a variation to their existing hardship relief.