Unclaimed super money
The intent of unclaimed super money (USM) is to preserve the value of lost member accounts in the super system.
Members are able to see if they have any USM if we can match these accounts to their tax file number (TFN). By showing their USM on our online services, they can find their super more easily and make an informed decision about consolidating their super money.
If you have clear and specific permission from your members, you can also get reports on these accounts through a SuperMatch2 search, as well as initiate rollovers from us into your fund.
What is changing for USM small lost member accounts?
The Tax and Superannuation Laws Amendment (2015 Measures No. 4) Bill 2015External Link received royal assent on 13 October 2015. It increases the threshold for USM small lost member accounts in two stages:
- The USM threshold will change from $2000 to $4000 from 31 December 2015
- The USM threshold will change from $4000 to $6000 from 31 December 2016
What tests do you need to complete for small and insoluble accounts?
You need to apply the lost member tests to work out if your member meets the definition of USM small and insoluble category to small lost accounts:
- accounts of up to the USM threshold where the member is lost uncontactable (up to two instances of returned mail and no contributions received for the last 12 months)
- accounts of up to the USM threshold where the member is lost inactive (member joined as employer-sponsored member, has been a fund member for over two years and no contributions received for the last five years).
Lodging your USM statement
What do you need to do with USM?
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. Lodging your USM statement first helps you to identify which members' accounts you reported and transferred to us as USM and should now be properly reported as ‘transferred’ for your LMR reporting. This ensures that these members' accounts are not incorrectly displayed as both 'lost' and 'ATO-held monies' on SuperSeeker.
How is interest paid on unclaimed super?
Previously, interest could only be paid on unclaimed super for former temporary residents who have since become permanent residents of Australia.
Interest will accrue and will be paid on nearly all USM, including for former temporary residents. Members receive this interest when they claim their money from us – this includes claims where USM amounts are rolled over to a fund.
How is interest calculated?
Interest is based on the consumer price index (CPI) or the Treasury bond rate, depending on the type and date the claim is made. The regulations provide specific details about how interest is calculated.
What is the correct tax treatment for the interest payments?
Interest paid on unclaimed super payments is treated as 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 from 1 July 2014 will be taxed at 47% under the departing Australia super payment (DASP) tax.
Remittance of USM
Remittance of USM will be communicated to you via a paper Rollover Benefit Statement (RBS) until the SuperStream data and payment standard is introduced. Payment will be made by electronic funds transfer (EFT) where we have the relevant details. Where EFT details are not available, payment will be made via cheque. A statement of account will be provided by paper, detailing the relevant payment for unclaimed money.
Payment variation advice (PVA) specification
The electronic PVA specification has been updated to incorporate USM. The PVA specification includes details of the USM remittance payment (initiated by a RBS) and the USM Recovery file.
If you cannot accept the rollover of USM from us (provided in the paper RBS) or you are unable to action the USM Recovery file, you will need to upgrade your systems to enable an electronic PVA to be sent to us.
If you are not set up to send an electronic PVA in response to the rollover or recovery file, a paper PVA statement is available. You may want to upgrade your systems to cater for electronic PVAs.
USM Recovery notices
USM Recovery notices have been included in the latest version of the electronic Remittance advice and recovery notice (RARN) specification. Circumstances which may result in a USM recovery notice being issued to you are:
- where a member’s USM had been rolled over to the super fund from us and subsequently we receive an amendment from the original reporting fund reducing the member entitlement
- an error was made and the member was not entitled to receive USM.
The recovery notice details information which will link back to the remittance RBS to enable you to identify the member. We expect USM recoveries to be low in volume.
Reporting Unclaimed Money Statements via paper – If only electronic statements will be accepted.