Government grab for unclaimed super

A new measure will ensure that unclaimed super will go to the Australian Tax Office

A new measure will ensure that significantly more unclaimed super will go to the Australian Tax Office (ATO). The decision to lower the threshold at which lost superannuation accounts are automatically transferred to the ATO was announced on Monday as part of the Mid Year Economic Financial Outlook (MYEFO).

Currently, if the owner of a superannuation account cannot be contacted, and the account holds less than $200, or there have been no contributions for at least five years, the account is transferred to the ATO.

In the new plan, which starts in January 2013, the account will be transferred to the ATO if there is less than $2000 in the account, or if no contributions have been made for at least one year.

At the moment the money in Australia’s lost super accounts adds up to about $17 billion. Should it be passed by parliament, this new policy will add $675 million in savings to the Federal Budget over the next four years.

All unclaimed money will be held in a trust by the Government until it is reclaimed. The Government will then pay interest equivalent to inflation on the unclaimed super, so that those who find their lost super do not lose money.

Comment – And there’s the catch

As soon as I heard that the Tax Office was going to take my super I was up in arms. How dare it? In the (not unlikely) event that someone at my super fund was incompetent enough to find themselves unable to contact me, the Government was just going to waltz in and take my money. The cheek of it!

Then I actually read the details, and I realised that this was a really, really good development. I had a knee-jerk reaction to a very clever piece of policy, which helps both the Federal Budget and me (and you, and your friends, and the people you don’t like very much but still say good morning to anyway, and everyone else).

Lost super accounts, especially those with small balances, usually end up empty anyway, because of the extraordinarily high fees and extra payments extracted by super funds. When the ATO comes in and takes over the account, it holds on to the money, it doesn’t charge you any fees, and if you do ever decide to reclaim it, the ATO even gives you the money plus the inflation back, without charging you a cent. That, to me, seems really clever. Now the interest on all that lost super will go to the Government, instead of to the private sector.

So what’s the catch? If you have purchased insurance through your super fund, it will become invalid once the ATO takes over your lost account. And since the reason it is classed as ‘lost’ is that they can’t contact you, you may never know your insurer has ceased to cover you. So be aware, even if you do reclaim lost super, you’ll need to reinstate your insurance separately.

If you think you may have lost super, you can find it using the ATO’s SuperSeeker tool, which searches for any lost super for you. 

Have you ever managed to reclaim lost super? How difficult was it? And do you think the Government had the little people in mind when it made this decision, or was it driven by greed?





    COMMENTS

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    Smee
    24th Oct 2012
    3:00pm
    So, now the govt can now get even more 'private money' even quicker. "Equivalent to inflation"; how is inflation calculated? If the govt uses the CPI as an indicator, you/we are being ripped off. The CPI IS NOT an indicator of the cost of living. Paul Keating many years ago started fiddling with the CPI formula and with successive government's interference, it is now not worth a cracker. If a government says that they are indexing some financial commodity to the CPI, it means they are increasing or paying interest on that commodity by the lowest rate possible. The govt will 'invest' your money at 'say' 5% and them give you back about 2%. Just as a matter of interest; the last 6 monthly CPI rise was 0.1%. Yes, read it again. One tenth of 1 percent. Rachael got it right. It is a grab and yes it is driven by greed and incompetence. No government, and especially this one and despite their smiling (ugly duckling) assurances, is truly trying to help us. Private health insurance rebate cuts, tax and price increases on bulk wine etc, defence health cuts and privatisation and why have the mid year mini budget (MYEFO) earlier than normal. Add them all up plus many more self inflicted measures and the answer is simple. Australia's debt is increasing at an alarming rate and to save face, our treasurer needed to present the outlook early because in two months time the outlook will be a darn site worse.
    Once again. How is this rate of inflation calculated?
    motaleon
    24th Oct 2012
    5:38pm
    You are dead right Smee. It is possible to make a blanket snaffle of funds just prior to stating the budget position; they will produce a surplus with snaffled funds - claim the surplus, and later refund everybody.
    The CPI is an unfunny joke. The basket of goods comes out of the computer to putthe best face on govt. performance and that always means robbing that part of the public tied to it for inflation adjustment. Bastards!
    Abby
    29th Oct 2012
    11:59am
    Knowing our government they will give it away to overseas countries to big note themselves whilst they are on one of their numerous jaunts - then they will borrow more money from the world market or sell off another part of Australia or possibly squeeze the Senior some more. They took away the Cataract Surgery,Private Health Fund and The Dental plan goes in December, so now the Senior is unable to see or eat just makes you wonder where else they can hit them.
    margieb
    24th Oct 2012
    3:18pm
    Don't hang around waiting for an answer to your Question Smee, you will be old and gray if you are not already lol. They won't answer you because they don't know how to.
    grumpygran
    25th Oct 2012
    11:19am
    I don’t think you’ve got this one quite right Rachel. Many years ago we worked hard paid our taxes, saved for our home and then went on the aged pension (for which we’d already paid). Super was unheard of – the only one I knew of in later years was the local Bank Manager. Then along came Keating (I think it was) and this “fund” was put into internal revenue – PRESTO it disappeared!! Hence the scramble now to cover any form of welfare. What concerns me is that once the super money is in the ATO will that “fund” also disappear in the next twenty or so years when someone else decides to put it into internal revenue, leaving another government to penny pinch from everyone, except themselves. Remains to be seen.
    Placido
    30th Mar 2017
    5:54pm
    grumoy gran, it was Menzies many years ago who put the "pension fund" into consolidated revenue not Keating.
    savannahrose
    25th Oct 2012
    4:15pm
    I don't call it "lost super", after my experience I now call it "stolen super". My elderly neighbour retired this year and kept going on about lost super, so I brought him home and attempted to find it for him. You are asked for the TFN and then add your name etc, but the website just kept insisting "no lost super". After questioning him I discovered the super he spoke of was from his time working for the Qld Government. I then rang QSuper and he verified his identity with them and we were told he HAD super with them, but it had been transferred only a few weeks previously and they suggested he ring them and see what had happened to it. Well good luck with that. I rang repeatedly and was met with the robot voice and every time the TFN was quoted the "voice" curtly informed "no lost super" and disconnected. Finally found another number online and tried that one and was eventually able to speak to an actual living person - a very surly, unhelpful voice, but at least one I could question. I was told that the reason we kept getting the "no lost super" was because he'd never notified QSuper of his TFN, which as far as I know is still not mandatory. He then told me to download a form from the ATO and get a statement from the super fund and provide lots of identification to them. Luckily for my neighbour he was able to get the statement and provide ID, but if we'd never found out who his super was held with, he would not have had a hope in hell of retrieving his money. All I can say is if anyone has had a few employers in their working life, I hope you can remember who your super was held with or that you provided your TFN. This is just another way of stealing people's savings by this incompetent government. They're helping themselves, not YOU.


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