Unclaimed cash to boost budget by $900m CLANCY YEATES October 22, 2012
From January, all super accounts of less than $2000 that have been inactive for one year or more will be transferred to the tax office. Photo: Andrew Quilty
The budget will receive a boost of almost $900 million under a plan to transfer millions in unclaimed money to the taxman and the corporate regulator. In a measure announced today, the government will collect an extra $675 million by lowering the threshold at which inactive superannuation accounts are automatically moved to the Australian Tax Office. At present, super accounts of people who cannot be contacted are transferred to the tax office if they hold less than $200 and there have been no contributions for five years. But from January, super accounts will be transferred to the ATO if the account's owner can't be contacted, there is less than $2000 in the fund, and there have been no contributions for one year or more. With the nation's lost super accounts holding about $17 billion, the change will deliver to the budget $675 million in savings over the next four years. The unclaimed money will be held in trust by the government, but members can reclaim their lost funds from the tax office. "These reforms will benefit individuals with small lost accounts by preventing these accounts from being eroded by fees and charges and protecting the real value of these balances," the government's Mid-Year Economic and Fiscal Outlook said. Similar treatment will be applied to unclaimed bank deposits and life insurance policies, giving the government an extra $92.3 million over the next four years. Under current rules, bank deposits can only be transferred to the Australian Securities and Investments Commission if they are inactive for seven years, but this will be cut to three years from January. Unclaimed company money will also be automatically transferred to ASIC, delivering $118.5 million in savings over four years. While the government expects to receive a boost from the changes, Superannuation Minister Bill Shorten said raising the threshold for unclaimed superannuation would help unite members with their retirement savings. "The ATO will use its data matching resources to match these lost accounts with members and assist those members to be reunited with their lost superannuation," Mr Shorten's office said in a statement. Under the changes, the ATO will also pay members an interest equivalent to inflation on their unclaimed super. At present, no interest is paid. The government said the reforms would help lower the amount of unclaimed super because it would encourage super funds to collect more information about their members while the accounts were active. Follow the National Times on Twitter
