The Association of Superannuation Funds of Australia has called on the government to amend the law to allow the ATO to repatriate 'lost' superannuation funds where the identity of the owner can be established.
As of 31 December 2016, the threshold below which inactive superannuation accounts are required to be transferred to the ATO was increased from $4,000 to $6,000.
The threshold was previously increased from $2,000 to $4,000 on 31 December 2015, and from $200 to $2,000 in 2012 – with all changes taking place as part of the Treasury Legislation Amendment (Unclaimed Money and Other Measures) Act 2012.
The intent, according to Treasury in 2012, was to "protect the balances of small accounts from erosion by fees and insurance premiums".
According to ASFA, this argument holds water for balances below $2,000, but larger balances are likely to be worse off in a CPI-linked ATO account than a typical default superannuation fund.
"A further concern is that these higher account balances are more likely to hold insured benefits," argued ASFA in its pre-budget submission, which was made public yesterday.
"There is also an increased likelihood that the member has consciously maintained an account for the explicit purpose of retaining insurance through that account."
ASFA said the "enhanced information" about account-holders that is now held by the ATO as part of increased reporting requirements would enable the repatriation of funds to an active super account.
"ASFA recommends that priority be given to amending the Superannuation (Unclaimed Money and Lost Members) Act 1999 Act so as to permit the Commissioner of Taxation to pay unclaimed money to a complying superannuation plan where the Commissioner is satisfied as to the identity of the lost member account owner and the person holds an account in the proposed destination fund."
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