New ATO powers deliver superannuation boost

The nest eggs of almost 500,000 Aussies will soon be boosted by half a billion dollars after the ATO was handed new powers. And there’s an added bonus, too.

Exclusive: Nearly half a million people are about to get a half-billion dollar boost to their retirement savings — and they won’t have to lift a finger.

The windfall emerges from the Australian Taxation Office’s first proactive crossmatching of forgotten superannuation against active accounts.

New powers have allowed the ATO to identify 485,000 unclaimed accounts containing a combined $473 million which in October will be returned to owners’ active super account, or bank account if the amount is less than $200.

“Previously only you could reunite ATO held super by using ATO online services or a paper form,” said ATO assistant commissioner for super Graham Whyte. “Now the ATO can do it on your behalf.”

New powers have allowed the ATO to identify 485,000 unclaimed accounts containing a combined $473 million which in October will be returned to owners’ active super account. Picture: Supplied

The sum being reunified equates to about 12 per cent of the $4 billion held by the ATO in 5.4 million accounts. It expects to be able to match more of what’s left.

The added bonus for the owners of the nearly half a million accounts is that they will no longer be paying for duplicate insurance they couldn’t even claim on because double-dipping is usually not allowed.

Death cover for a 40-year-old could strip $150 a year from a duplicate account, as could income protection insurance.

Super Consumers Australia, which is a division of Choice, said the reforms would protect people from a “double whammy” of administration fees and insurance premiums.

“Big insurers and super funds have been behaving like silent parasites for years, quietly nibbling away at the retirements balances of half a million accounts that had been long since forgotten,” Super Consumers senior policy adviser Cameron Sinclair said.

“It is amazing that it took so long, and so much hand wringing, to stop this enormous silent drain on retirement savings,” Mr Sinclair said.

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The new powers that allow the ATO to proactively return super come from the Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019, which passed federal parliament in February this year.

The act also requires funds to transfer accounts of below $6000 to the ATO after 16 months of inactivity. The ATO will then seek to redirect the savings to an active account.

Some industry experts have estimated that up to one quarter of all super accounts could be transferred.

But the ATO expects the share will be much lower.

The deadline for trustees to transfer inactive low-value accounts is the end of October.

Originally published as New ATO powers deliver superannuation boost