AIST is calling for a reduction in the threshold at which ‘small’ lost superannuation member accounts are transferred to the ATO, from the current $6,000 back to $2,000.
In the past the ‘small’ lost super account threshold at which superannuation was transferred to the ATO was $200. This was increased to $2,000, then $4,000, and then to the current $6,000.
AIST recommends, in its 2018/19 pre-Budget submission, that this threshold should be progressively reduced – to $4,000 on 1 January 2019 and then to $2,000 in 2020.
AIST says the need for such a high threshold is reduced by new initiatives that make lost superannuation less of an issue, such as SuperStream and Single Touch Payroll.
“We further believe that the rules regarding lost and unclaimed superannuation are unnecessarily complicated and we would welcome measures to streamline these rules,” says AIST.
“We additionally believe that the ATO will be able to direct more resourcing to matching lost super with members as the benefits of Single Touch Reporting and the MAAS [Member Account Attribute Service] and MATS [Member Account Transaction Service] projects begin to crystallise.”
The organisation also recommends that increases to the Super Guarantee rate recommence, with an aim of reaching 12% by July 2022. The SG rate is currently scheduled to reach 12 on 1 July 2025. The submission also recommends that SG be based on gross remuneration rather that Ordinary Time Earnings, to “ reduce confusion, red tape, and manipulation”.
AIST also supports the recommendations of the advocacy group Women in Super (WIS).
“AIST agrees with WIS that this is a crisis affecting women entering the workforce, who will face the same fate as women retiring, if this situation is not rectified.”
These recommendations include an additional annual $1,000 government super contribution for low income earners, paying SG on paid parental leave, removing the $450 monthly threshold to receive SG and publishing gender impact statements for changes to the age pension or retirement incomes policy.