ATO To Begin Returning Money From Inactive Super Accounts
Across November 2019 cash payouts are about to arrive in the bank accounts of an estimated 2.6 million Australians, and for many it will be a surprise. From Friday the 1st of November you will either receive money in your everyday bank account or your superannuation account from the ATO. This comes with law changes surrounding superannuation.
Why will we receive the money?
The cash will come from each of your inactive super accounts under a new law change. This change was made to reunite people with lost superannuation sitting in abandoned accounts. These could be from previous jobs where you were automatically signed up to a default super account without realising it.
The “Protecting Your Superannuation Package” requires super providers to report and pay all accounts with a balance less than $6000 straight to the ATO. The ATO has found that there are 5 million of these accounts worth $3.9 billion. Consolidating these super accounts will reunite workers or retirees with lost money.
Who will receive the money?
If you have an inactive super account with less than $6,000 you will receive the balance in either your active super account or into your everyday bank account. The ATO will send you a notification if they have paid your super into a bank account or an inactive super account.
The payment will happen automatically. This means that you will not have to do anything to claim the lost super, it will simply be transferred from the ATO into one of your accounts. Each payment would also include an interest component which has been set to the consumer price index instead of the market rate.
Where will the money be deposited?
Where the money will go will depend on your age and the amount. If you are over 65 all lost super found will be returned to your everyday bank account directly. For those under 65, amounts below $200 will be sent to your everyday bank account, anything over will be transferred directly into your active super account.
How much money?
The overall amount of money will vary depending on your inactive super accounts. Each payment could be as little as $40 or $50 all the way up to tens of thousands of dollars. These amounts will be welcome news for retirees who may have lost a large portion of their super.
It is always a good idea to look over your super, ensuring that your accounts are consolidated or updated. This is especially true if you have large amounts of money in super accounts that are not your primary, active account. Individuals have always been able to contact the ATO to ensure their accounts have been reunited, however many were not aware of their lost super.
If you are unsure where all your super is or need assistance in managing your super, you should talk to an accountant and a financial planner. Any proactive accountant will have a great relationship with multiple financial planners, and will work with them to make sure you are on track with your super. For accountants you can trust, talk to Link Advisors today.