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  • Inactive low-balance accounts and proactive consolidation

    The Treasury Law Amendment (Protecting Your Superannuation Package) Bill 2019 received Royal Assent on 12 March 2019. The law introduced a new category of accounts to be reported and paid to us – inactive low-balance account (ILBA).

    The new law also gives us authority to consolidate certain ATO-held super amounts on behalf of individuals. We no longer need to be directed to do so by the individual.

    On this page:

    Reporting and paying of ILBAs

    Super funds are required to identify ILBAs on the two unclaimed money days each year (that is, 30 June and 31 December). Super funds need to report and pay the balance to us by the end of the scheduled statement day, as follows:

    • For accounts identified on 30 June, the scheduled statement day is 31 October of the same year.
    • For accounts identified on 31 December, the scheduled statement day is 30 April of the following year.

    Only accounts that meet the criteria for ILBA on the unclaimed money day and continued to meet the criteria on the corresponding scheduled statement day are to be reported and paid to us.

    Note that this only applies for ILBA as different rules applied to other unclaimed super money (USM) categories.

    Members who declare they're not an ILBA member

    Members who wish for their accounts to remain with their super fund need to provide a written notice declaring that they are not a member of an ILBA. This can be done by completing the form titled Inactive low-balance accounts – authorising your fund to provide a written declaration to the ATO.

    There are two channels for super funds to process this declaration, depending on where the member sends the form, either directly to us or to the super fund.

    Member sends the form to us

    On a daily basis we'll run a check and populate the Channel A – ILBA member declaration template with relevant details and send it to the fund via the Business Portal.

    Super funds need to ensure they have appropriate access to receive these templates. Super funds will update their system with the date we received the declaration, then exclude these members from the USM scheduled statement day for that period or until the 16 months have expired.

    Declarations received after the super fund has completed their reporting and payment (or after the scheduled statement day) will be sent to the super fund with no further action required. Super funds should explain to the member that the reporting and payment has already concluded and their account had appropriately been sent to the ATO.

    Member sends the form to the super fund

    Super funds update their system with the date the trustee notified the ATO of the member’s declaration. They then need to access the Channel B – ILBA member declaration template to upload data, on the unique superannuation identifier (USI) level, via the Business Portal. The accounts nominated by the members should be excluded from the USM scheduled statement day for that period or until the 16 months has expired.

    Next step:

    If a member’s account again meets the definition of an ILBA after 16 months, the member will need to complete a new form so it is not considered to be an ILBA by the next unclaimed money day.

    Interim reporting solution

    Super funds will be required to report and pay inactive low-balance accounts by the scheduled statement date, with the first being by 31 October 2019. However, SuperStream Rollover message implementation guide (MIG) v2.0 doesn't include a separate reason code for the ILBA category and a new reason code will not be implemented until April 2021 with Rollover MIG v3.0.

    An agreement has been made with industry that the ‘Insoluble lost member accounts’ USM reason code 'P' would be used as an interim solution to report ILBA as well.

    The lost status indicator reported via the Member Account Attribute Service (MAAS) will be used to account for the total of each category.

    We'll use the following formula to determine the number of ILBAs:

    Total number of accounts reported using reason code P minus
    Total number of accounts with lost status indicator reported via MAAS.

    Super funds will be able to report and pay ILBA with the appropriate code, using Rollover MIG v3.0 for the scheduled statement date commencing in 2021.

    Proactive consolidation

    Super funds that can accept government rollovers may receive rollovers from us where your members have certain types of ATO-held super and they have an eligible active account in your fund.

    We use information reported to us via your MAAS and Member Account Transaction Service (MATS) lodgments to determine if your member has an eligible active account.

    See also:

    Last modified: 06 Nov 2019QC 60541