Unclaimed super monies
What is the policy intent?
The intent of the recent changes to unclaimed super monies (USM) is to preserve the value of lost member accounts in the super system. This measure will mean you will be transferring more lost accounts to us.
Members can see these accounts displayed on our online services, SuperSeeker, so they can easily find their super and make an informed decision about consolidating their super monies.
You can also get reports on these accounts through a SuperMatch search with your members' specific permission and may initiate rollovers from us into your fund if requested by your members.
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Your members' consent must be very clear and specific to performing one or both of these activities.
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From 1 July 2013, we start paying interest when individuals' unclaimed super money is returned - this means lost accounts retain their value in real terms when they're reunited with the rightful owner.
What is decided?
Have the protocol documents and specifications been developed?
Yes, the electronic reporting specifications for the unclaimed super money and lost members statements have been updated for you to use now. There are no new fields - only wording changes to the existing technical definitions.
A draft copy of the Electronic reporting specification -- Lost members' statement version 5.5.1 is now available.
A final Electronic reporting specification - Unclaimed Superannuation Money (USM) version 5.0.2 has been published, incorporating definition changes to small and insoluble lost member accounts.
The protocol documents are being finalised and will be published soon.
What are the changes to the definition of lost member and impacts for USM small lost member accounts?
As part of the changes, the definition of a lost uncontactable member has been updated to include an activity test - a member must first meet the lost member definition for their account to qualify as a small lost member account. This change developed from industry input to make sure you will not have to transfer accounts to us that are still receiving contributions.
Your members are considered uncontactable if you have not received a contribution or rollover from or on behalf of them within the last 12 months of the member's membership of the fund and either:
- the fund has never held an address for the member, or
- two written communications have been returned unclaimed.
If one written communication has been sent to the last known address and returned unclaimed you may choose to class the member as uncontactable. However, if you have previously reported a member as lost uncontactable based on the return of one written communication, you do not have the option of reversing this position and relying on the mandatory requirement to report only after two written communications have been returned. This means you must apply the new definition of small and insoluble accounts to the previously reported lost accounts, unless a contribution or rollover has been received in the last 12 months.
If you have a new member you are receiving contributions for, but you don't have their address details, they are not considered a lost uncontactable member. Because the member is not a lost member, their account does not need to be reported and paid to us if their balance is below $2,000.
What are the changes to the definition of lost member and impacts for USM insoluble lost member accounts?
The definition of an insoluble (inactive) lost member account has changed and the inactivity period (the period where no contributions or rollovers have been received) is reduced from five years to 12 months. You still need to be satisfied that it will never be possible to identify the owner of this account before you report and pay the amount to us.
What do you need to do with unclaimed super money?
You must identify all unclaimed super money accounts that you hold in your fund as at the unclaimed money day. The first unclaimed money day the changes apply is 31 December 2012.
Your USM statement and payment of members' accounts must be lodged by the end of the scheduled statement day. For the first reporting period following these changes, the government has provided a one-month extension for your small and insoluble lost member USM reporting. Your USM statement for small and insoluble members is due 31 May 2013.
However, it is important that your lost members' statement for the same period reflects the correct status of accounts transferred to us, as reported on your USM statement. By lodging your USM statement first, it helps you to identify which members' accounts you reported and transferred to us and should now be properly reported as 'transferred' for your LMR reporting - this ensures that these members' accounts are not displayed as both 'lost' and 'ATO-held monies' on SuperSeeker. For this reason, we have also extended the lodgment date for the next Lost Member report (see below).
When do you need to report and pay unclaimed super?
To help you with your reporting obligations, we have deferred the date to 31 May 2013 for:
- reporting and paying unclaimed super money (USM) general accounts, and
- reporting lost member accounts on the lost member statement.
Set out below is a summary of your reporting and payment obligations:
For the half year ending 31 December 2012
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Scheduled statement day
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USM General:
- member over 65 years
- non-member spouse
- deceased.
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31 May 2013
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USM small and insoluble lost member
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31 May 2013
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USM former temporary resident
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30 April 2013
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Lost member statement
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31 May 2013.
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The scheduled statement date for USM statements for temporary residents has not changed, and remains at 30 April 2013.
Following this, USM reporting reverts to the usual scheduled statement days - 31 October and 30 April.
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Can you get a further extension to lodge and pay?
If you are unable to lodge and pay your USM statements by the due dates, you may request a deferral of time to lodge or make a payment. Your request should include the reasons for being unable to meet the extended due date of 31 May 2013 and the additional time you believe is required to meet your obligations.
How is interest paid on unclaimed super?
Currently, interest can only be paid on unclaimed super for former temporary residents who have since become permanent residents of Australia.
From 1 July 2013, interest begins to accrue and be paid on all unclaimed super. Members receive this interest when they claim their money from us - this includes claims where USM amounts are rolled over to a fund.
Are unclaimed super monies paid proactively?
Currently, we are making proactive payments of unclaimed super monies of up to $200 - since June 2012, we have made over 280,000 payments to individuals. We can only pay amounts up to $200 without the direction of the member.
If we can identify a correct TFN, the reported amounts are displayed for individuals on SuperSeeker - from here; they can transfer this money online to the super fund account of their choice.
What isn't decided?
How is interest calculated?
Interest is based on the consumer price index (CPI). We pay interest on all claims, including temporary residents.
When the regulations are made, they will provide specific detail about how interest will be calculated and we will then be able to give you more information.
What is the correct tax treatment for the interest payments?
Law has been introduced into parliament which provides that interest paid on unclaimed super payments from 1 July 2013, is a tax-free component of a super benefit.
However, this does not apply to former temporary residents - interest paid on unclaimed super payments to former temporary residents after 1 July 2013 will be taxed at 45% under the Departing Australia Super Payment (DASP) tax.
Last Modified: Friday, 5 April 2013