Inactive low-balance super accounts
New laws starting 1 July 2019 requires super funds to report and pay inactive low-balance super accounts to the ATO. Where possible, the ATO will proactively consolidate the inactive low-balance accounts into active super funds on behalf of the individual if the individual hasn’t requested a direct payment of this money or for it to be rolled over to a fund of their choice. These changes by the Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019 were introduced to protect an individual’s super savings from reducing by fees.
Super providers, excluding SMSFs and small APRA funds, will be required to report and pay inactive low-balance accounts to the ATO as a new category of unclaimed super money (USM) for the first time by 31 October 2019.
Super funds are required to identify inactive low-balance accounts on 30 June and 31 December each year and then report and pay them to the ATO by the statement date.
For accounts identified on:
- 30 June, the statement date is 31 October of the same year
- 31 December, the statement date is 30 April of the following year.
The balance of inactive low balance accounts must be reported and paid to the ATO by the statement date.
What is an inactive low-balance super account?
According to the ATO, a super account meeting the following criteria is a inactive low-balance super account:
- no amount has been received by your fund for crediting to that account for your benefit within the last 16 months
- the account balance is less than $6,000
- you have not met a prescribed condition of release
- the account is not a defined benefit account
- there is no insurance on the account
- the account is not held in a self-managed super fund (SMSF) or small Australian Prudential Regulation Authority (APRA) fund
What is NOT an inactive low-balance super account?
If any of the following have occurred in relation to you in the last 16 months the super account is not an inactive low-balance super account:
- you have changed your investment options
- you have made changes to your insurance coverage
- you have made or amended a binding beneficiary nomination
- you have made a written declaration that you are not a member of an inactive low-balance account
- there was an amount owed to the super provider in respect of you.
Nothing at this stage. The balance of your inactive low-balance account will be transferred to the ATO by your super fund.
However, if you do not want your super transferred to the ATO you can contact your super fund about this. The ATO have further instructions regarding this at this ATO link here