Lost and Unclaimed Superannuation

Lost superannuation and unclaimed super

Lost superannuation, unclaimed superLost superannuation and unclaimed super are different things, though they can both end up with the same result. Some lost and unclaimed super can is required to be transferred to the ATO, earns only interest at the rate of CPI, and is unlikely to be returned to the owner.

Lost Superannuation

Some lost superannuation can be required to be transferred from a super fund to the ATO. Lost superannuation is super which relates to ‘lost member’.The Superannuation (Unclaimed Money and Lost Members) Act 1999 points to the SIS regulations for the definition of a lost member, in particular regulation SISR 1.03A. This section says there are two kinds of lost members: uncontactable and inactive.

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Unpaid super costs Australians $2.5 billion each year

Unpaid super, unpaid superannuationResearch by three large superannuation funds has found that unpaid super affects 650,000 workers, “leaving them collectively out of pocket almost $2.5 billion annually.”

Unpaid Super

The average worker who has unpaid super loses “around $3,750 per annum”, which the research says equals around 9 months worth of superannuation.

ASFA CEO Pauline Vamos said that the research highlights why it is important for people to check their superannuation, particularly young people.

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When is lost superannuation transferred to the ATO?

Lost superannuation transferred ATOPreviously the threshold for lost superannuation to be transferred to the ATO was $200. However this changed in December 2012, when the limit was increased to $2,000.

This change was made in the Treasury Legislation Amendment (Unclaimed Money and Other Measures) Act 2012, which required that:

  • The amount at which a super account must be transferred to the ATO was increased from $200 to $2000
  • The period of inactivity before accounts belonging to unidentified members were transferred to the ATO was decreased from five years to twelve months
  • Interest will be paid on the accounts, but only at the rate of CPI

Part of the reason for this change was to reduce the growing number of lost and inactive superannuation accounts. Industry Super Australia estimated Australians have, on average, 2.5 superannuation accounts each and there may be “more than 10 million excess accounts.”

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44% of super fund members have multiple accounts, says ATO

ATO - Superannuation members multiple accountsAccording to the ATO 44% of Australian super fund members have more than one superannuation account.

This is one reason why the ATO is taking a “special interest” in multiple super accounts, said ATO Assistant Commissioner John Shepherd in a speech to the Tax Institute National Superannuation Conference.

According to Shepherd the ATO is now using super accounts “matched to a TFN along with matched SMSF accounts to gauge the number of super accounts that individuals hold”. The ATOs statistics show that, approximately:

  • 56% of people have one account
  • 26% of people have two accounts
  • 10% of people have three accounts
  • the remainder have four or more accounts.

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Number of lost super accounts drops, unclaimed super rises

According to the ATO its efforts, including SuperSeeker and working with super funds, has resulted in a 30% drop in the number of lost superannuation member accounts. A recent statement by the ATO said:

The culmination of these efforts has resulted in the number of lost member accounts at 30 June 2014 reducing by over 30% in comparison to 30 June 2013, with an associated reduction of over 10% in the value on the Lost Members Register.

However this isn’t the full picture of lost and unclaimed superannuation, as per a note to the most recent ATO lost and unclaimed super statistics:

“Lost uncontactable and lost inactive accounts are still held by super funds, whereas unclaimed super money and SHA accounts have been transferred to the ATO. ”

So in the ATO statistics lost superannuation is only superannuation held by super funds, unclaimed superannuation is transferred to the ATO. While the number of lost superannuation accounts did drop by 31% in 2013/14 the total number of lost and unclaimed super accounts only dropped by 1%. Based on the recently released ATO statistics the number of unclaimed super accounts held by the ATO rose by 19%:

Lost Superannuation and Unclaimed SuperannuationSource: ATO statistics

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