Changes for Inactive Super Accounts
The Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019 introduced a new category of accounts known as ‘inactive low-balance accounts’ to automatically consolidate eligible unclaimed super money into eligible active super accounts through the Australian Taxation Office in order to protect their retirement savings from being eroded by fees and other charges.
Are you affected?
A super account is an inactive low-balance account if:
- no amount has been received by your fund 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 does it mean for you?
The new rules mean “inactive” accounts will have their insurance cover terminated from 1 July 2019 – unless you want to keep your insurance and take action now.
Your super account may still be considered active and not transferred to the ATO if you undertake any of the following activities in the last 16 months:
- changed your investment options under the fund
- made changes in relation to your insurance coverage under the fund
- 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
What you need to do:
You are not required to do anything if you are happy for your inactive low-balance account to be transferred to the ATO by your fund and, where possible, be proactively consolidated into an active super account on your behalf.
However, if you have an account that you do not want transferred to the ATO as an inactive low balance account, you can:
- Make a contribution or a rollover to reactivate the account before 1st July 2019
- consolidate your super accounts using ATO online services through myGov
- authorise your super fund to provide a written declaration to the ATO, your fund will notify the ATO that you are not a member of an inactive low-balance account and they will not need to report on your inactive low-balance account
The ATO estimates that many Australians have more than one superfund account, on which they could be paying premiums on multiple insurance policies. Now is the perfect time for superannuation members to check their accounts and insurance arrangements. Contact us if you need assistance or require more information regarding the changes.