Claim it or lose it puts frighteners on lost or unclaimed super members.
The Australian Taxation Office is likely to receive a massive windfall after recent changes allow it to hold untouched super accounts with balances of up to $2,000. Previously it could receive super accounts with balances of less than $200.
Hundreds of thousands of idle superannuation accounts will be handed over to the ATO in coming months if members don’t take action to recover lost and unclaimed funds.
Superannuation fund providers have until 31 May to transfer these accounts across to the tax office.
OBT Director Rodney Turner says super fund members need to act now to retrieve their lost or unclaimed funds before their money is transferred.
“It is not an unsubstantial amount of money that is going to be moved to the ATO,” says Rodney. “There are a lot of forgotten about accounts floating around in the system.”
On average, every Australian has almost three super accounts. It is common for people to accumulate multiple super accounts as they change jobs, with many people failing to consolidate accounts along the way.
ATO says there are about 1.1 million accounts on the lost members register with balances between $200 and $2,000. Not all of these will be eligible for transfer as some may be receiving contributions and some will be reunited with their owners.
What does it mean?
Latest statistics show there are 3.4 million ‘lost’ super accounts worth $16.8 billion and more than 2.8 million unclaimed super accounts totalling $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. The new changes afforded to the ATO mean:
- If you have lost or inactive super accounts with less than $2,000 in them, your money will be transferred to the ATO by the end of May.
- There is no formal opt-out. 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 1 July, and it’s only at the rate of CPI, so you’ll be disadvantaged if your superannuation fund’s returns are above CPI.
Finding any lost or ATO-held super
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.
The good news is that it is a simple process to track down your lost or unclaimed super.
If you’ve ever changed your name, address or job, you may have some lost super and be listed on ATO’s lost members register. ATO may also be holding, on your behalf, amounts paid to them by employers, super funds or the government. To find out if you have any lost or ATO-held super, use ATO’s free online search tool SuperSeeker.
You can locate 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. Also speak with us about consolidating your funds in the coming weeks.Source: Courier Mail