Inactive low-balance super accounts
The Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019 introduced a new category of accounts that need to be reported and paid to us – inactive low-balance accounts.
To protect accounts from fee erosion, inactive low-balance super accounts will be transferred to us and, where possible, we will proactively consolidate your super on your behalf.
Inactive low-balance accounts
Generally, a super account is an inactive low-balance account if the following criteria are met:
- no amount has been received by your fund for crediting to that account for your benefit within the last 16 months
- the account balance is less than $6,000
- you have not met a prescribed condition of release
- the account is not a defined benefit account
- there is no insurance on the account
- the account is not held in a self-managed super fund (SMSF) or small Australian Prudential Regulation Authority (APRA) fund.
However, the account will not be an inactive low-balance account if any of the following have occurred in relation to you in the last 16 months:
- you have changed your investment options
- you have elected to maintain insurance on the account
- you have made changes to your insurance coverage
- you have made or amended a binding beneficiary nomination
- you have given your fund a written notice electing not to be a member of an inactive low-balance account.
Depending on how your account is structured with your fund, they may need to consider some of the above criteria at a product level within your account. This may mean that only part of your account is paid to the ATO.
Funds are required to identify inactive low-balance accounts on 30 June and 31 December each year and then report and pay them to us by the statement date.
For accounts identified on:
- 30 June, the statement date is 31 October of the same year
- 31 December, the statement date is 30 April of the following year.
The balance of inactive low balance accounts must be reported and paid to us by the statement date.
What you need to do
You are not required to do anything. The balance of your inactive low-balance account will be transferred to us by your fund and, where possible, we will proactively consolidate it into an active super account on your behalf.
If you have a super account that you do not want transferred to us as an inactive low-balance account, you can:
- consolidate your super accounts using ATO online services through myGov
- contact your super fund for more information
- provide a written notice to your super fund.
See also:
Written notice electing not to be a member of an inactive low-balance account
Your super account is taken not to be an inactive low-balance account if you, by written notice given to your super fund, declared that you are not a member of an inactive low-balance account. The written notice is valid for 16 months.
Example
Jane has a super account with a balance of $4,500 on 30 June 2020. It has received no contributions in 18 months. Jane wants to keep this account with her fund. To ensure it is not transferred to the ATO as an inactive low-balance account, on 28 September 2020 Jane provides her fund with a written notice electing not to be a member of an inactive low-balance account.
Due to the written election provided to her fund, Jane's account is not considered an inactive low-balance account and that status remains in place until the 31 December 2021.
If Jane’s account meets the criteria of being an inactive-low balance account at the 31 December 2021 and she doesn't provide another written election, her fund will report and pay this account to us on the 30 April 2022 statement date.
End of exampleSee also:
Super funds are required to transfer the balance of inactive low-balance accounts to us and, where possible, we'll proactively consolidate these into active super accounts.