The Government should make it easier for the ATO to use the information it has to reunite people with their unclaimed superannuation held by the ATO, says ASFA. Meanwhile a Minister has suggested super funds aren’t trying hard enough to contact members with lost super.
Recently released figures show the ATO holds $3.75 billion in unclaimed super, with $14.12 billion in lost super held by super funds.
The Association of Superannuation Funds of Australia (ASFA) has reiterated its call for the ATO to be allowed to pay unclaimed super directly to a person’s current super fund.
ASFA said one reason for the increase in unclaimed super is that larger accounts now need to be transferred to the ATO. In recent years governments have increased the threshold at which super is transferred to the ATO, from $200, though $2,000 and $4,000, to the current level of $6,000. Both the Coalition and Labor have said this is to protect accounts from erosion. Interest is paid on these amounts, but only at CPI. ASFA estimates that the increase from $4,000 to $6,000 captured an additional 100,000 accounts, containing a total of $220 million.
ASFA says the Government should amend the Superannuation (Unclaimed Money and Lost Members) Act 1999 to allow the ATO to use the information it has to find active super fund accounts for unclaimed super.
“The holding of Tax File Numbers and other identifying information in regard to most superannuation accounts makes it relatively easy for the Commissioner to match lost member account owners with their current active superannuation accounts,” said ASFA.
“A move to place the responsibility on the ATO to reunite lost accounts with their true owners would be welcomed by consumers, and make it easier for them to get engaged with their super. It would also benefit young people who regularly move jobs yet fail to take their super balances with them to their new fund.”
Meanwhile a Treasury Minister has suggested super funds aren’t trying hard enough to contact lost members and reunite them with their lost super. Minister for Revenue and Financial Services Kelly O’Dwyer was asked on South Australian radio if super funds have an obligation to try and contact lost members.
“Well if one was being a bit cynical one might say that some of these funds do wait for a period of time because, as you can see, there’s over $14 billion of lost super there,” answered Minister O’Dwyer.
Super funds are bound by rules about when and how superannuation becomes lost and when it needs to be transferred to the ATO as unclaimed.