New legislation has been passed by Parliament which is designed to protect people’s super.
Many of the new measures were part of the 2018/19 Federal Budget’s ‘Protecting Your Super Package’ and relate to fees, lost member accounts and insurance arrangements. Other measures were recommendations from the recent Royal Commission report.
What are the changes?
Some of the new changes specifically involve superannuation funds where there is an ‘inactive low balance.’
Low balance accounts
Super funds are required to transfer ‘inactive low balance’ accounts to the Australian Taxation Office (ATO) every six months. The ATO is now also responsible, where possible, for consolidating this money with the person’s other active super account or to their Estate if they have passed away.
An inactive low balance account is now broadly defined as an account of under $6,000 where no activity has occurred in the last 16 months. This includes no contributions made to the account in the last 16 months and where there is no active insurance on the account. Other new definitions also apply.
Changes to insurance
If you have an account that is considered ‘inactive,’ insurance must not continue unless you specifically opt in to retain your insurance cover. An inactive account is one that has not received a contribution (including a rollover) for the past 16 months.
These changes take effect from 1 July 2019.
To find out whether you may be affected, contact Jeanette Schram at Nett Assets Financial Planning on 03 9545 0699 or email jeanette@nettassets.com.au.