Thousands of Aussies to lose up to $2000
HUNDREDS of thousands of idle superannuation accounts will be handed over to the Australian Taxation Office in the coming months if members don’t take action to recover lost and unclaimed funds.
The ATO is likely to receive a massive windfall after recent changes were implemented allowing it to hold untouched super accounts with balances of up to $2000. Previously it could receive super accounts with balances of less than $200.
Superannuation fund providers have until May 31 to transfer these accounts across to the tax office.
Latest statistics show there are 3.4 million “lost” super accounts worth $16.8 billion and more than 2.8 million unclaimed super accounts totaling $887 million.
Lost super sits in funds and belongs to people who have usually changed their name, address or job and cannot be found by their fund.
Unclaimed super is when the member meets eligibility requirements to withdraw it but the super fund cannot contact them.
Members will lose insurance arrangements once their fund transfers their account balance to the ATO, but they will not have to pay any fees once they move across.
Sunsuper general manager of customer experience Teifi Whatley says Australians need to act now to retrieve their lost or unclaimed funds before their money is transferred.
“It is quite a significant amount of money that is going to be moved to the ATO,” Whatley says. “There are a lot of super-fluous accounts floating around in the system … every Australian has almost three super accounts.”
Whatley says it is common for Australians to accumulate multiple super accounts as they change jobs, with many people failing to consolidate accounts.
An ATO spokesman says there are about 1.1 million accounts on the lost members register with balances of between $200 and $2000.
“Not all of these will be eligible for transfer as some may be receiving contributions and some will be reunited with their owner,” he says.
The average balance of lost member accounts is $4940 and $317 for unclaimed super.
Australian Institute of Superannuation Trustees executive policy manager Tony Garcia says it is a simple process to track down your lost or unclaimed super.
“New enhancements to the SuperSeeker site following ATO consultation with the industry should make the process of finding super a lot easier,” he says.
“The site is a lot more powerful and allows you to view and combine your current super accounts.
“You can find any lost super reported to the tax office and any super the ATO holds on your behalf, and transfer your lost super to the super account you want.”
WHAT DOES IT MEAN?
* If you have lost or inactive super accounts with less than $2000 in them, your money will be transferred to the ATO by the end of May.
* There is no formal opt-out. To to be excluded you need to contact each of your super funds.
* You could be classified as lost if your previous employer gave a super fund your wrong address.
* Getting your money back from the tax office requires a lot of time.
* You will lose any insurance arrangements you have with your fund.
* You will only be entitled to interest on the money the ATO holds on your behalf from July 1, and it’s only at the rate of CPI, so you’ll be disadvantaged if your superannuation fund’s returns are above CPI.