Lost money to go to tax man

From January, the government will automatically move lost superannuation accounts to the Tax Office if the account balance is less than $2,000 and there have been no contributions for a year or more. This replaces the current rule that transfers accounts with balances under $200 after five years of no contributions.

The government says lowering the threshold to $2,000 and shortening the inactivity period will save members from paying unnecessary fees on small, inactive accounts and will also boost the budget by an estimated $675 million in savings over four years.

Lost super accounts collectively hold about $17 billion. The change to the automatic transfer rules for lost super is expected to deliver $675 million in savings to the budget over four years.

Yes — members can reclaim their lost super from the Tax Office. The Tax Office will pay interest on unclaimed super at a rate equivalent to inflation; currently no interest is paid on those amounts under the old rules.

Unclaimed bank deposits and life insurance policies will be treated the same way as lost super, with changes expected to boost budget coffers by $92.3 million over the next four years.

At present, bank deposits can be transferred to the Australian Securities and Investments Commission (ASIC) only if inactive for seven years. That inactivity period will be cut to three years, meaning unclaimed deposits will be moved to ASIC sooner.

Unclaimed company money will be automatically transferred to ASIC under the new arrangements, delivering an estimated $118.5 million in savings to the budget over four years.

Yes — the article states that transferred funds will be held in trust by the government. Members can reclaim their amounts from the Tax Office, which will pay inflation-equivalent interest on unclaimed super.