29 May 2019
There are new changes on the way for those with multiple and low balance superannuation accounts.
From July 1, inactive low balance superannuation policies can be consolidated into a member’s existing active superannuation account by the ATO on behalf of the policy holder.
To be consolidated, the policy must have a balance of $6,000 or less and deemed inactive (having not received any contributions for 16 months).
Additionally, insurance cover on inactive superannuation accounts will cease from July 1.
A risk for the above is that if members are holding insurance cover in inactive super fund accounts that they wish to retain it may be inadvertently cancelled through the new rules. Members should notify their super fund provider immediately if this is the case.
These measures are part of the Protecting Your Superannuation Package legislation which was introduced to make it easier for people to consolidate multiple accounts, and avoid low balance superannuation accounts being eroded by unnecessary duplicate insurance policies.
Superannuation funds will be contacting affected members to advise of the changes prior to July 1, with members having the option to continue their cover if they elect to.
More information can be found on the ATO website: https://www.ato.gov.au/Super/APRA-regulated-funds/In-detail/News/Protecting-your-super-package/
Please contact the team at Shakespeare Financial Services on 08 9321 2111 if you’d like to discuss how the above may apply to your individual situation.
General disclaimer: Our firm provides the information on this website for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles on this website are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose
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