O'Donnell Kerr Financial Planners
  • 04 September, 2019

Lost and Found - Where is your super?

The Australian Taxation Office (ATO) administers lost and unclaimed superannuation. As of 30 June 2018, the ATO were sitting on around $17.5 billion of lost and unclaimed superannuation.

When a member of a superannuation fund becomes “lost”, or their super benefits are “unclaimed”, the money is transferred to the ATO.

But, that is not necessarily a bad thing, as the former super fund will no longer be deducting fees and, since 1 July 2013, the ATO pays interest on the transferred benefit, albeit at a rate equal to the increase in the Consumer Price Index. Importantly, super that is transferred to the ATO is not forfeited. In fact, the ATO is now required to proactively reunite taxpayers with their lost superannuation.

Understanding the way in which lost and unclaimed super is managed is mind boggling. It is not an easy system to understand.

However, hopefully the following comments will help to unravel the maze, at least a little.

Firstly, what is unclaimed super?

Unclaimed super may arise in a number of circumstances; however, it generally occurs when a person who is entitled to their super has not claimed it, and the super fund has not had contact with the member for a period of time.

Perhaps one of the most common is when a person reaches the age of 65.

As superannuation benefits can be accessed by an individual who has turned 65 without restrictions, benefits will become unclaimed if the super fund has not been in contact with the member in the previous five years and has been unable to contact the member after making reasonable enquiries.

Other circumstances where a benefit may be treated as unclaimed arise where a super benefit has been split following a relationship breakdown and the fund has been unable to ensure the non-member spouse receives the amount.

The third situation that may result in a superannuation benefit being treated as unclaimed arises when a member of the fund has passed away, the fund determines the benefit is immediately payable as a lump sum death benefit, and after making reasonable enquiries, the fund is unable to ensure the benefit is paid to a person who is entitled to receive it. 

Unclaimed super benefits may also be transferred where the benefit is held by a former temporary resident whose visa has expired, and they have left Australia.

As they ATO receives shared data from the Department of Home Affairs (Immigration), once the ATO receives advice a former temporary resident has left Australia, the ATO will inform the former residents super fund and request their benefit be transferred to the ATO as unclaimed super.

Small or insoluble lost member accounts will also get caught under the unclaimed super regime.

Lost members may be either an “uncontactable” lost member, or an “inactive” lost member.

A member will be considered to be uncontactable where their super fund never had an address for the member or the fund has made one or more attempts to contact the member at their last known address, and the member has not been in contact with their fund in the past 12 months, and the member has not accessed details of their account by logging in electronically, and the fund has not received a contribution or rollover in respect of the member in the last 12 months.

On the other hand, an inactive lost member is one who joined their super fund as an employer-sponsored member more than two years previously, and the fund has not received a contribution or rollover in respect of the member in the previous five years.

With the changes to superannuation laws that came into effect from 1 July 2019, there is now a new class of person who may be caught by the unclaimed superannuation rules. These are those people who hold inactive low-balance accounts. An inactive low-balance account will be transferred to the ATO as unclaimed super where:

  • No contribution or rollover has been received for a continuous period of 16 months, and

  • The account balance is less than $6,000, and

  • The member has not met a condition of release, and

  • The account is not a defined benefit account, and

  • There is no insurance on the account, and the fund is not a self-managed super fund or a slam APRA fund.

While the ATO is proactively attempting to reunite lost and unclaimed super with its rightful owners, individuals can search for their own lost super by logging in or creating their own myGov account (www.my.gov.au), linking their account to the ATO, and then selecting Super.

Hopefully the new initiatives being implemented by the ATO to reunite members with their lost and unclaimed super, will help to reduce the amount being held by the ATO.

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