Protecting Your Super Legislation: Inactive Low-Balance 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 made changes to your insurance coverage
- you have made or amended a binding beneficiary nomination
- you have made a written declaration that you are not a member of an inactive low-balance account
- there was an amount owed to the super provider in respect of you.
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 an 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 fund for advice
- authorise your super fund to provide a written declaration to us
Source: Written by the Australian Tax Office, May, 2019.