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  • Trustee voluntary payment of other amounts

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    The Law

    You will find the provisions governing the voluntary payment of other amounts by trustees to the ATO in Part 3D of the Superannuation (Unclaimed Money and Lost Members) Act 1999 (SUMLMA).

    Under section 22 of the SUMLMA superannuation providers may pay to the Commissioner an amount in respect of a member, former member or non-member spouse if the trustee reasonably believes paying the amount to the Commissioner would be in the best interest of the person.

    An amount payable to us under section 22 must not be:

    • unclaimed money
    • payable to a person identified in a section 20C notice
    • an inactive low-balance account
    • held in an eligible rollover fund
    • a lost member account.

    Reporting and payment

    Super providers may report and pay certain amounts voluntarily to us. The amounts can be identified and reported at any time during the year, including the existing USM dates. The concept of unclaimed money day and statement day do not apply to these payments.

    In determining whether an account is to be paid to us under section 22, you must:

    • ensure the payment is in the best interest of the member, former or non-member spouse
    • the amount is not required to be paid to us under another provision of the SUMLMA.

    Under subsection 22(2) a superannuation provider must give us a statement of information for each account to be paid as trustee voluntary payment of other amounts in the approved form.

    Subsection 22(3) prescribes what amount must be paid to us. The trustee voluntary payment amount payable for the member, former member or non-member spouse is the amount that would have been payable if the person requested that the balance held in the account be rolled over or transferred to a complying superannuation fund.

    Example: Amount held for a former member

    The Smith superannuation fund has held an amount on behalf of Georgie the past 2 years. The amount is for a remediation payment the fund received on behalf of Georgie after she exited the fund.

    At the last unclaimed money day, the amount:

    • did not meet the criteria in the SUMLM Act of unclaimed money
    • is not held in an inactive low-balance or lost member account.

    The Smith superannuation fund has not had any contact with Georgie since she exited the fund and mail sent to Georgie 6 months ago was returned to sender.

    Given the amount is not held in an account and the trustee has previously been unable to contact Georgie, it would be reasonable for the trustee of the Smith superannuation fund to decide it was in the best interests of Georgie to transfer the amount held to the Commissioner without trying to make further contact with Georgie.

    End of example

    Example: Insurance is being deducted from the account

    The Poppy superannuation fund holds an account on behalf of Henri. The balance of the account is $9,000. The last contribution to the account was 18 months ago. Life and Total and Permanent Disability insurance premiums are being deducted from the account.

    Given insurance is being deducted from the account, it would likely not be reasonable for the trustee of the Poppy superannuation fund to decide it would be in the best interests of Henri to transfer the balance of the account to the Commissioner.

    End of example

    Example: Drawing down on an account based pension

    The Lola Superannuation Fund holds an amount on behalf of Samantha who has reached preservation age and is in the process of drawing down on an account-based pension.

    As Samantha is in the process of drawing down on a pension – regardless of the frequency of drawdowns, or whether the member is generally contactable – it would likely not be in her best interests for the Lola superannuation fund to voluntarily elect to transfer the amount held to the Commissioner.

    End of example

    Example: Individuals are no longer eligible to be members of a fund

    The Terrence superannuation fund holds a number of amounts on behalf of persons who are no longer eligible to be members of that fund because the Terrence superannuation fund limits membership to current employees of a particular entity. The Terrence superannuation fund has not received any payment or transfer instructions, and the former members are no longer contactable.

    At the last unclaimed money day, the amounts did not meet the criteria in the SUMLMA of unclaimed money and the amounts are not held in an inactive low-balance or lost member account.

    It would be reasonable for the Terrence superannuation fund to elect to voluntarily pay the amount to the Commissioner under the voluntary payment category.

    End of example

    Payments by us

    If we are satisfied and it is possible to, we must pay the amount we received for a person under section 22 (that is, an amount paid on a voluntary basis) as follows:

    • to a complying fund identified by the person
    • if the person has not died – to the person if
      • they have reached eligibility age
      • the amount is less than $200
      • they have a terminal medical condition
       
    • if the person has died
      • to their death beneficiaries or legal personal representative
       
    • if none of the above applies
      • to an eligible active super account held on behalf of the person.
       

    Interim reporting solution

    Although the provisions allow for Trustee Voluntary Payment reporting and payment to occur at any time, the ATO is coordinating the transfer of this new category of unclaimed super money (USM) for an interim period.

    The enduring reporting solution for this new category is a new USM code that is being delivered in the SuperStream Rollovers version 3 project which all funds will transition to by 30 September 2021. Until then, an interim reporting solution has been developed to enable the ATO to identify amounts that are reported and paid as trustee voluntary payments.

    See also:

      Last modified: 07 May 2021QC 65600