Temporary residents will now have access to the same superannuation payment arrangements as Australians, under new changes announced by the Government.
In May, the Government initially proposed that superannuation balances of temporary residents would be diverted to the Australian Taxation Office. The balances would attract no interest.
If the balances were not claimed within five years of leaving Australia, temporary residents forfeited all their superannuation savings, a measure labeled as discriminatory by The Australian Institute of Superannuation Trustees (AIST).
The Government has implemented new changes following industry consultation.
"We've carefully listened to both industry and community feedback during the public consultation process and as a result, we've decided to significantly modify the administration of the temporary residents' superannuation policy," Minister for Superannuation and Corporate Law Nick Sherry told an audience at the Investment and Financial Services Association (IFSA) conference on Friday.
Under the new changes, temporary residents' superannuation will be paid to the Commonwealth. The superannuation will grow in a fund, while the person continues to live in Australia.
Temporary residents that have left the country will, at any time, be able to claim back any superannuation that has been paid to the Commonwealth, Sherry said.
Temporary residents will also have access to insurance cover offered by superannuation funds while they live in Australia.
The Government received 47 submissions from industry on its proposals for temporary residents.
