Document ID: chunk:federal_register_of_legislation:F2023C00836:reg:4:p1
Version: federal_register_of_legislation:F2023C00836
Segment Type: reg
Provision Reference: reg 4 (pt 1/4)
Character Range: 13447–16602

4     Permanent Incapacity       Where the person has ceased gainful employment by reason of mental or physical ill-health and the person is unlikely ever again to engage in gainful employment of the type for which the person is reasonably qualified by education, training or experience.

           601KEB Hardship withdrawals

           Power to allow hardship withdrawals
(1) Subject to this section, the responsible entity of a frozen scheme may allow a member to withdraw (hardship withdrawal) from the scheme in accordance with a provision of the scheme's constitution that provides that the responsible entity may allow a member to withdraw if:
                  (a) the member has made a hardship withdrawal request; and
                  (b) the responsible entity is satisfied that:
                     (i) the member falls within a hardship category; or
                     (ii)  where the member is deceased—a beneficiary of the estate of the deceased member falls within a hardship category; or
                     (iii) where the member is an operator—a person (instructor) who has asked the operator to exercise a right to withdraw falls within a hardship category.
           Responsible entity must notify ASIC and members before allowing hardship withdrawals
              (2) The responsible entity must not allow a hardship withdrawal unless:
                  (a) the responsible entity has, since the scheme most recently became a frozen scheme, given written notice to ASIC that the responsible entity proposes to allow hardship withdrawals and that includes a statement signed by a director or secretary of the responsible entity that the board of the responsible entity has resolved that that:
                     (i) the scheme is a frozen scheme; and
                     (ii) the board has considered expected hardship withdrawals and believes on reasonable grounds that the scheme property will include adequate cash over the following 6 months to meet hardship withdrawals from members and continue the day-to-day operations of the scheme; and
                     Note:  If the scheme ceases to be a frozen scheme after the responsible entity gives a notice under paragraph (a) and then becomes a frozen scheme again, the responsible entity will need to give a new notice under paragraph (a) if it wishes to allow hardship withdrawals.
                  (b) before allowing the first hardship withdrawal for each period during which the scheme has become a frozen scheme, the responsible entity has given each member of the scheme written notice by post or by email explaining the effect of allowing hardship withdrawals; and
                     Note: A single notice could be used for the purposes of paragraph 601GCC(2)(a) and paragraph 601KEB(2)(b).
                  (c) the responsible entity has published a statement on its website:
                     (i) explaining the effect of allowing hardship withdrawals; and
                     (ii) in a way that it is likely to come to the attention of a person looking for information about the scheme on the website.
           Responsible entity to notify ASIC