Frozen mortgage fund withdrawals get bigger
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 cap on hardship withdrawals for each member has been raised to $100,000 each calendar year, from $20,000 plus 50 per cent of the member’s interest.
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 hardship grounds have been extended to cover a beneficiary of a deceased estate of a member where the beneficiary is suffering hardship; and to make it clear a person unemployed for at least three months without other means may apply for hardship relief.
ASIC first announced hardship relief measures in October 2008. 1452 withdrawal payments have been made with an average withdrawal of $25,024. The existing hardship relief criteria (which continues in operation):
1) 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) Permanent incapacity.